- Binance is being sued by Italian and foreign investors over crypto losses.
- Lawsuit alleges outages in Binance from the year 2021.
- Binance has recently received approval to conduct business in Italy.
Binance, the world’s largest cryptocurrency exchange, will face an Italian court this week as part of a class-action lawsuit brought by investors demanding compensation for losses sustained as a result of platform failures at peak trading hours last year.
In November 2021, a group of Italian and international Binance users filed a lawsuit against the firm and CEO Changpeng Zhao, citing several occasions on which the platform had gone offline and locked users out of the exchange. The investors claim they lost “tens of millions” because they couldn’t adjust their trading positions due to the disruptions.
The lawsuit further alleges that Binance’s offering of leveraged futures products violates relevant financial regulations in Italy. This comes as Binance makes strides in its efforts to comply with the law and acquire the appropriate permits from relevant authorities.
In July last year, Italy’s financial authority issued a warning that Binance was not authorized to provide investment services in the nation, setting the stage for potential legal action against the exchange.
As of May 2022, it had been officially approved by authorities. Binance was required to demonstrate compliance with anti-money-laundering legislation and have a physical presence in order to win clearance.
This isn’t the only legal case Binance is involved in at the moment. Previously, the exchange was facing a lawsuit involving the sale of TerraUSD in Northern California. Consequently, American investors were seeking damages after the collapse of the Terra and UST ecosystem.
According to a staff member from Senator Cynthia Lummi’s office, several cryptocurrency exchanges operating in the U.S., including Binance, are being investigated. Furthermore, the U.S. Securities and Exchange Commission is also examining if the exchange violated securities laws back in 2017 with its initial coin offering.