A group of international traders filed a lawsuit against the cryptocurrency exchange Binance. They allege that the company failed to provide access to its infrastructure during peak loads and caused multi-million-dollar losses, according to the Financial Times.
The plaintiffs are six traders from Ukraine, Australia, France and the United States. They have valued the claim at more than $20 million and hope that several hundred more investors will sign on to their complaint.
In May the digital-asset market collapsed amid restrictions by Chinese authorities. The traders claim that on May 19 there was a disruption on Binance’s futures platform, making it inaccessible. The plaintiffs’ positions were forcibly liquidated because they could not adjust them.
The Swiss company Liti Capital will allocate at least $5 million to fund the litigation against Binance in Hong Kong. The plaintiffs will be represented by the New York law firm White & Case.
“One way or another, this case will be landmark. We intend to determine what restrictions, if any, exist on what these large organizations can and cannot do,” said David Kay, executive chairman of Liti Capital.
In July, a similar lawsuit against Binance was filed by the Italian law firm Lexia Avvocati. Together with the Swiss Blockchain Consortium, it acts on behalf of traders harmed by the outage.
Lexia Avvocati said that the exchange had agreed to compensate clients a portion of the lost funds, calling the amount of reimbursement “meagre” and “ridiculous.” The firm intends to push for regulatory restrictions on Binance in Switzerland and the European Union.
In July Binance announced plans to wind down the ability to trade crypto-derivatives in Europe, starting with Germany, Italy and the Netherlands.
In August the exchange took a similar step regarding clients in Hong Kong.
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