Mid-May when cryptocurrencies suddenly started to plunge one after another, Binance froze, stranding its users in the middle of a crypto apocalypse. World’s largest cryptocurrency exchange froze for over an hour two months ago, costing hundreds and thousands of traders their fortune. Many traders wanted to file a complaint against the exchange but Binance’s lack of headquarters made it difficult for them to approach the right authorities.
Over 700 traders are filing a lawsuit together against Binance with the help of their lawyer, Aija Lejniece. However, it is not easy to drag Binance down, as nobody has whereabouts on its headquarters. Binance has already declared itself a ‘truly decentralized’ exchange platform after facing regulatory actions from several nations, upon setting up an office in their respective territories without proper registration.
Binance Traders Were Left in Shock and Dismay
One of the traders on the platform Anand Singhal experienced ‘seven minutes in hell’ when all his savings including over $24,000 he had earned from trading, disappeared on 19th May when Binance froze him and thousands of other users out. Nobody could sell out their stash when BTC and other cryptocurrencies crashed.
“Binance has traumatized me, I’ll never trade again”, Anand told the Wall Street Journal.
As a result, some were left with little to cover their losses, while others were left with zilch. Many traders had placed leveraged bets on BTC from Binance, which allowed them to bet more money than they had in their accounts. Binance facilitated leverages that mounted up to bets worth $125 of crypto for every dollar the trader had in their accounts.
Upon losing the bet, the losses were blown up and all the holdings were liquidated by the exchange platform. Nothing different than what might happen to many in Las Vegas, but Anand Singhal had not been gambling for fun or out of greed, he had made a calculated trade but Binance’s system failure led him and many to lose a fortune.
Binance’s legal woes have mounted over the past month as it faced regulatory backlash from five different nations and the current lawsuit has only added to its legal troubles.