On May 19, bitcoin (BTC) tumbled 30% in 24 hours, a move that created panic in the cryptocurrency market and led to a wave of sales by investors desperate to minimize their losses. However, Binance, the world’s largest digital asset brokerage, and other exchanges were down and their clients were unable to move their portfolios. Since then, many people have wanted to sue the cryptoactive bag, but they don’t know how.
It turns out that Binance does not have a headquarters and the broker’s clients who feel aggrieved do not know who to turn to to file a lawsuit. During Bitcoin’s sudden crash in May, which until then was the worst of 2021, Binance was down for about an hour as the cryptocurrency tumbled.
Users unite to be able to sue Binance
Extremely unhappy customers talked with the Wall Street Journal about the subject. Apparently, there are at least two groups in France and Italy that have hundreds of people looking for a way to sue the broker. Lawyers representing these users in Europe said they sent letters and emails to at least 11 brokerage addresses on the continent.
The exchange said it “took immediate steps to interact with users affected by the outage” and provide compensation. However, a user told the Wall Street Journal that this “indemnity” was three months free of the broker’s VIP platform.
Binance is not a highly regulated company compared to traditional banks, which leaves the intervention of justice and other institutions more limited. According to the broker’s own guidelines, clients seeking compensation for any reason are advised to file a lawsuit at the Hong Kong International Arbitration Center (HKIAC), which can be extremely expensive for a person to only pay from the West.
“Binance has made it difficult, but not impossible, for the average consumer to seek recourse in court,” attorney Aija Lejniece, who currently assists the French group of enraged customers, told the Wall Street Journal. She hopes that by working together they will be able to obtain “full compensation for user losses”.
Customers also complain about frozen accounts
In addition to this May episode, other clients have been complaining since the second half of 2020 that their Binance accounts are frozen by “identity verification processes” after the brokerage has flagged their activities as suspicious. However, some of these blocks can last for many months.
Through the US access to information law, the gizmodo obtained 32 of more than 700 complaints filed by Binance customers with the Federal Trade Commission (FTC). The most common pattern in the documents is of investors who have placed large amounts in cryptocurrencies through the brokerage house, and have had or still have their portfolios frozen without knowing why.
The second most common case in complaints to the FTC is very different: it appears that many people have been scammed while trying to communicate with Binance for support. The broker does not have a dedicated customer service phone number. If someone searches Google for a way to call the exchange, they end up with several fake phones that, in turn, ask for confidential information.
With information: Wall Street Journal, Gizmodo