A group of Binance customers are trying to get their money back after the platform froze in May. These users had leveraged positions and were unable to reduce or close them. On May 19, Binance’s app crashed for more than an hour, leaving customers unable to manage their funds. These users are now pursuing legal action against the stock exchange in France and Italy.
Users organizing to reclaim funds from Binance
A group of users affected by outages in the Binance service are organizing themselves against the exchange. Hundreds of people are pursuing legal action in France and Italy after the stock exchange froze on May 19. Such is the case with Anand Singhal, a freelance programmer who took on a leveraged position with more than $ 50,000. When Singhal started reviewing prices and saw the impending decline, he tried to get out of his position.
But he couldn’t. Due to the sharp drop in prices Bitcoin and other cryptocurrencies were experiencing at the time, Binance’s platform was unable to handle the transaction load. Hundreds of thousands of traders were trying to do the same thing at the same moment: to leave the market. The platform crashed, leaving traders unable to manage their positions for over an hour.
Singhal and other traders lost their money as a result. And now they are fighting back. According to the Wall Street Journal, at least 700 users are seeking legal recourse to reclaim their funds from Binance in France. And in Italy, more and more users are asking Binance on the same subject.
Crashes happen frequently
However, these crashes are nothing new in the world of cryptocurrency exchanges. Even Coinbase, one of the largest and most regulated cryptocurrency exchanges, had to grapple with similar issues. In fact, Coinbase was struggling at the same time as Binance. Robinhood, a toll-free exchange, also struggled with outages and was fined $ 70 million by the Financial Industry Regulatory Authority (FINRA).
But Binance is a headquartered exchange and because of this, it will be difficult for these users to recoup their losses. Binance said it contacted most of the affected users to offer compensation for the issues. Either way, disgruntled users who are still looking for a refund must file their complaints with the Hong Kong International Arbitration Center under Binance’s Terms of Service.
This news comes at a time when Binance is facing increasing regulatory oversight by the world’s governments as several institutions blocked payments to the stock exchanges in the UK and Europe last week. To further complicate matters, Binance also received warnings from securities regulators in the UK, Japan, the Cayman Islands and Thailand just last month
What do you think of the actions that users are taking against Binance? Let us know in the comments section below.
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