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A group of investors filed a class-action complaint against Binance, a major cryptocurrency exchange, demanding damages for losses incurred amid platform failures at crucial trading moments last year. Binance has to appear in court on Thursday in Italy. In November 2021, several Italian and international Binance users filed a complaint against the business and CEO Changpeng Zhao, alleging several instances in which the network lost connection and locked users out of the exchange. The investors claim that the interruptions prevented them from changing their trading positions and resulted in "tens of millions" of dollars in losses. Binance is not the first cryptocurrency exchange to go offline as trade volumes increase. Furthermore, the lawsuit claims that by allowing Italian customers to trade leveraged futures on the platform, Binance broke Italian financial laws.
Warning Issued By Financial Authorities Of Italy
A complaint against the exchange was already in the works when Italy's financial authorities issued a warning in July of last year that it was not permitted to offer investment services in the nation. Binance received approval earlier this year to join an Italian regulator-maintained list of cryptocurrency service providers. The registration alone does not guarantee compliance with local laws and is only a step towards holding businesses to national anti-money laundering standards.
No Defense Offered By Binance
A group of Italian customers of Binance contacted the Swiss blockchain consortium last year seeking guidance on reclaiming losses incurred by outages. The crypto exchange did not participate in the preceding and had not submitted any statements of defense. After hearing all the statements and considering all the evidence, the court will determine the issue without Binance present on September 15 at the Court of Milan. The firm will forfeit its ability to submit statements of defense if no one from Binance appears.