Class action against Binance launched in Milan, “damages for tens of millions”

Class action against Binance launched in Milan, “damages for tens of millions”

22 November 2021 24

In recent months we have told you about how the law firm Lexia Avvocati, in collaboration with the Swiss Blockchain Consortium, had taken on the task of starting legal action against cryptocurrency exchange Binance aimed at obtaining “, we read on the site where the initiative was published,” financial derivatives so-called ‘ futures ‘ on cryptocurrencies, as well as anomalies relating to the operation of the trading platform managed by the operator in question “.

Today Lexia Avvocati communicated that having filed with the Court of Milan all the necessary documentation to allow the procedure to start which was brought against the cryptocurrency exchange, its founder Changpeng Zhao and some managers of the company. Below you will find the official press release issued by the firm and its clients today.

CLASS ACTION AGAINST BINANCES BEFORE TO THE COURT OF MILAN

These are the reasons of the users who joined to start the legal action , we will notify you should an official response from Binance arrive:

Lexia Avvocati has for some months undertaken a series of initiatives against Binance (one of the main cryptocurrency exchanges in the world, recently chosen as the main sponsor of the SS Lazio team) in relation to inefficiencies of the Binance Futures platform and the offer in Italy of derivatives on cryptocurrencies. In recent days, the Firm has initiated a class action, pursuant to art. 840 – bis and following cpc, before the Court of Milan at the Section Specialized in business matters. The class action – brought against the main companies belonging to the Binance group, as well as against its founder and CEO, Mr. Changpeng Zhao and some former directors of the companies of the Binance group – constitutes one of the first applications of the new discipline on the subject, made operational with the Decree-Law 28 October 2020, no. 137, converted with amendments by Law 18 December 2020, n. 176.

The start of the class action reaches the culmination of an intense activity carried out by the Firm in the previous months, which allowed, among other things, to highlight the numerous critical issues of the Binance platform, bringing them to the attention of the Supervisory Authorities of numerous foreign countries and of Consob.

The conduct carried out by Binance is also being examined by the Public Prosecutor’s Office at the Court of Milan following a complaint presented by some stakeholders.

To date, numerous Italian and foreign investors have conferred a mandate on the Firm, complaining of damages for tens of millions of euros. The Firm will continue to cultivate the aforementioned initiatives and any further activity aimed at protecting its clients and all those who will contact the Firm in relation to this matter.

Investors are assisted by Lexia Avvocati with a team composed of the Managing Partner Francesco Dagnino, by the Partner Angelo Messore and by the Senior Associate Michele Mennoia assisted by the Associates Ilaria Vigorosi, Nicola Giliberti, Carlo Giuliano and Filippo Maria Belfatto. Internal activities are also coordinated by Roberto Ghio and, for criminal matters, by Paolo Di Fresco, both Of Counsel di Lexia Avvocati.

REASONS FOR LEGAL ACTION

We contacted the law firm in question to ask for clarification regarding what were the disputes made to Binance, receiving this response:

Following Elon Musk’s tweet of February 8 2021 – which resulted in significant price fluctuations on the cryptocurrency market – Binance suspended access to the System for several hours, without any formal justification and without give any notice or communication to the Customers. As a result of the suspension, clients were prevented from giving instructions on their accounts to settle their futures trading positions. Once the margin limits were reached, Binance liquidated the amount deposited in the clients’ wallets at the expense of the clients.

In the following days (i.e. the 23 February 2021) Binance acknowledged the system failure through a notice posted on the platform. In the notice, Binance acknowledged that in the above circumstances “ some users, including API users, were unable to perform the following actions , which may have affected their futures trading positions: a) transfer their funds which affected their trading guarantee balances; b) view their open trading positions; c) view account balances; d) open and / or close trading positions. Interested users can email futures @ binance .com to request a complaint ” .

Some of the customers have relied on the invitation expressed in the above notice and submitted their claims with Binance seeking compensation for the losses they suffered as a result of the system crash that occurred on February 8 2021. While acknowledging its responsibility for the events that occurred and the consequent losses suffered by customers, in response to these requests Binance offered a derisory amount to compensate for the losses suffered and customers had no choice but to reject such laughable proposals.

Further system failures occurred in the following months. In particular, the 19 May 2021 Binance suspended access to the system for several hours. Again, the suspension caused material losses to Clients, who were unable to adjust their trading positions to the significant price fluctuations resulting, among other things, from the announced ban on cryptocurrency and mining services approved by the Chinese authorities.

Similar incidents occurred on April 2021, May 5 2021, the 28 May 2021 and June 4 2021, and to the best of Clients’ knowledge, Binance has not undertaken any remedial action to fix the functioning of the System.

Basically, during some days of great volatility, users complain to Binance the inability to access their contracts futures , to close them or increase collateral available to the position, leading to their liquidation.


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