Binance is preparing to file a class action lawsuit in Italy over the outages it experienced in 2021. Investors who filed the lawsuit demand that the stock market is closed during critical trading times and that the losses be compensated. Here are the details…
Binance faced legal challenge
Binance will go to court over a lawsuit related to the outages it experienced in Italy. Local media outlets reported that Italian and international investors filed lawsuits and demanded compensation for damages. The cuts took place in 2021. The lawsuit was filed in November 2021, and investors said the cut came at a critical time for trading. Many exchanges faced disruptions in 2021 due to various events that caused huge price fluctuations. Investors wanted to cash out their holdings during major price movements.
For example, Binance, Gemini and Kraken faced cutbacks in February 2021 after Tesla said it would invest $1.5 billion in Bitcoin. The lawsuit also says that Binance violated financial regulation by offering leveraged futures products. This comes as Binance is making progress by working with regulators to obtain the necessary licenses and ensure they comply with the law.
Stock Exchange faces multiple investigations in the US as well
Binance is in the middle of many legal battles. A class action lawsuit has been filed in Northern California over the sale of UST to Binance USA. American investors sought compensation for damage following the collapse of the Terra and UST ecosystem. A staff member from Senator Cynthia Lummis’ office said exchanges operating in the US, including Binance, are being investigated. The SEC is also investigating whether the exchange’s ICO violated securities laws. The ICO was about the BNB token, which is one of the largest tokens by market cap.
Italian regulators said the exchange was not allowed to operate in the country in 2021. Since then, it has been making an effort to gain approval, as it has in other countries. In May 2022, Italy succeeded by obtaining regulatory approval. The approval required Binance to have a physical presence and a commitment to comply with AML regulations. Exchange CEO Zhao said that “clear and effective regulation is essential for the mainstream adoption of cryptocurrencies.”
Binance is an exchange founded in 2017 and is registered in the Cayman Islands. Currently, there are 357 coins and 1,466 trading pairs on the exchange. The last 24-hour volume of the cryptocurrency exchange is over $27 billion. Transaction volume has increased by 25 percent in the last 24 hours. In the stock market, the most active trading pair in the current situation is the Bitcoin (BTC) / Tether (USDT) trading pair with a volume of 8.5 billion dollars.
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