Binance suffers backlash from crypto crash

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Binance froze for over an hour as the price of bitcoin and other cryptocurrencies fell and this has now led to legal action, the Wall Street Journal (WSJ) reported on Sunday July 11.

Those who made leveraged bets on rising cryptocurrency prices now want their money back.

The problem is the unregulated nature of Binance, which has no headquarters, making it difficult for aggrieved parties to know where to petition.

The WSJ reported that around 700 traders are now working with a French lawyer to try to recoup their losses, along with other such cases in Italy. The Italian case against Binance saw lawyers send letters to 11 Binance addresses they managed to find, as well as an email to the help desk.

We took immediate steps to engage with users affected by the outage, as well as provide compensation, a spokesperson said, according to the WSJ. The spokesperson added that we remain happy to speak to anyone who contacts us with a concern regarding the outage.

Binance also published an open letter in which President Changpeng Zhao called the idea of ​​having an archaic head office, according to the WSJ. But he said the company is determined to comply with all local rules.

This year has seen the volatility of bitcoin and other cryptos show in full swing, with prices high at the start of the year and with Binance handling much of the activity.

When prices collapsed, flaws in Binances’ methods of handling large volumes of transactions were exposed. As a result, Binance suffered a backlash from users.

Binance has recently been criticized for the way it runs its business, with authorities in Japan and the Cayman Islands claiming that Binance does not have the proper licenses to operate there.

Additionally, several companies have severed ties with the crypto exchange. Among the companies that cut the bridges is Clear Junction.

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