A group of investors from Italy and other countries filed a class-action lawsuit against Binance.
The plaintiffs seek to recover damages for losses sustained during Binance’s platform outages that took place in 2021.
Binance is scheduled to appear in court on Thursday, September 15 in Italy.
The group of investors cite many incidents where Binance’s platform went dark and kept users from accessing the cryptocurrency exchange.
The investors also claim that the disruptions prevented them from changing their trading positions and resulted in losses of “tens of millions” of dollars.
Furthermore, the lawsuit claims that by allowing Italian customers to trade leveraged futures on the platform, Binance broke Italian financial laws.
When Italy’s financial authority issued a warning in July of last year that Binance was not permitted to offer investment services in the nation, legal action against the exchange was already in the works.
Binance received approval earlier this year to join an Italian regulator-maintained list of cryptocurrency service providers.
The registration alone does not indicate compliance with local legislation and is just a preliminary to submitting corporations to anti-money laundering requirements in the nation.
Binance Offered Compensation
The cryptocurrency exchange tried to offer a compensation amount due to any potential losses caused by the platform’s outages.
However, the plaintiffs stated that the proposed compensation was not enough, and decided to follow the lawsuit.
Given that Binance has not yet entered the case, it has not yet submitted any statements of defense. The deadline for a defense statement to be presented to the court is 10 days before to the hearing.
Blockchain Consortium‘s website is offering users who could have been hurt by the cryptocurrency exchange’s outages to join in the class-action lawsuit against Binance.
Outages in Cryptocurrency Exchanges
Unfortunately, Binance is not the only cryptocurrency exchange that experiences outages as trade volumes increase.
When bombastic news drives the price of cryptocurrencies, traders swarm the exchanges, and historically, the platforms have a tendency to collapse under the larger user load.
Disappointed investors cite one instance from February 2021, when several prominent cryptocurrency trading platforms, including Binance, Kraken, and Gemini, encountered technical difficulties as a result of massive trading requests following news that Elon Musk’s Tesla had invested $1.5 billion in bitcoin.