Binance froze for over an hour while the price of bitcoin and other cryptocurrencies fell — and now this has led to lawsuits, The Wall Street Journal (WSJ) reported Sunday (July 11).
Those who made leveraged bets on the rises of cryptocurrency prices now want their money back.
The issue is the unregulated nature of Binance, which has no headquarters — making it tough for the aggrieved parties to know whom to petition.
WSJ reported that around 700 traders are now working with a French lawyer to try and recoup their losses, along with other such cases in Italy going on. The Italy cases against Binance have seen lawyers sending letters to 11 Binance addresses they managed to find, along with an email to the help desk.
“We took immediate steps to engage with users affected by the outage,” as well as to provide compensation, a spokesperson said, per WSJ. The spokesperson added that “we remain happy to speak to anyone who reaches out to us with a concern about the outage.”
Binance also published an open letter where chair Changpeng Zhao called the idea of having headquarters “antiquated,” per WSJ. But he said the company was dedicated to complying with any local rules.
This year has seen the volatility of bitcoin and other cryptos on full display, with the prices going high early in the year and with Binance handling a large portion of the business.
When the prices crashed, the flaws in Binance’s ways of handling large trading volumes were revealed. As a result, Binance experienced backlash from users.
Binance has come under fire as of late for the way it runs its business, with authorities in Japan and the Cayman Islands saying Binance doesn’t have the proper licenses to operate there.
Additionally, several companies have cut ties with the crypto exchange. Among the companies that cut ties is Clear Junction.