Cryptocurrency investor wants millions of dollars back from Binance

Cryptocurrency investor wants millions of dollars back from Binance

Make investors lose goods Million dollars Due to a technical problem, Binance – the world’s largest cryptocurrency exchange – is in demand by users.

According to the Wall Street Journal, Anand Singhal has learned to code since he was 13 years old. $ 50,000. With this money, his dream of becoming a computer scientist in the USA could come true.

However, on May 19, in just 7 minutes, all of Singhal’s accumulated money disappeared.

With the price of Bitcoin and a number of other cryptocurrencies plummeting, Binance – the world’s largest cryptocurrency exchange – froze for an hour. Leveraged orders that were highly valued by investors including Singhal were suddenly blocked.

During the market collapse, the exchange seized user margin mortgages and liquidated holdings. Singhal said he died 50,000 won U.S. dollar plus profit 24,000 won U.S. dollar from previous transactions.

Incident on slide day

To get the lost money back, Singhal and 700 investors found a lawyer in France. In Italy, another group of users complains to Binance about the same problem. Lawyers representing the group sent emails to 11 Binance addresses in Europe and an email to the help desk.

According to a Binance spokesman, the volatility of the crypto market on May 19 led to a technical bottleneck on the stock market. “We are urgently networking with affected users. We are happy to speak to anyone who is interested in technical questions, ”announced a Binance representative.

Unlike traditional investment platforms, Binance has no headquarters and is not regulated. Even Changpeng Zhao, the founder of Binance, once thought the idea of ​​establishing a headquarters was antiquated.

Since the beginning of 2021, the cryptocurrency craze has shaken the investment community around the world. According to CryptoCompare data, the majority of trading in digital assets goes through Binance. Binance almost processed it in May alone 2,500 Billion USD derivative transactions.

Analysts say the May 19 incident exposed Binance’s vulnerabilities. This exchange is unable to handle large volumes of transactions and creates backlash from users.

Binance does not currently have a license to operate in Japan and the Cayman Islands. In addition, the UK authorities stated that the exchange was not authorized to conduct financial-related activities. Some banks in the country also prevent customers from transferring money to Binance.

In the US, Binance does not redirect users to the official website. Instead, users have to visit the exchange’s other address, Binance.us. This is an exchange that offers spot cryptocurrency trading. Since it does not offer derivatives, Binance.us does not need to register with the US Commodity Futures Trading Commission.

Make it difficult for users

Changpeng Zhao, aka CZ, is a 44-year-old Chinese-Canadian programmer. CZ founded Binance with the idea of ​​helping investors buy and sell cryptocurrencies and offering financial products such as futures and margin.

Binance is a famous cryptocurrency exchange that attracts many investors from all over the world. The official website of the exchange is currently available in more than 30 languages.

After the May 19 incident, Aaron Gong, a Binance leader, tweeted an apology, stating that the exchange staff will be reaching out to support with those affected. However, that tweet was quickly deleted.

Singhal said Binance released an application form. The content of the answer surprised him, however. In particular, Binance offered to upgrade Singhal’s account to a VIP package within 3 months, in return he only had to agree to “release and discard forever” the lost funds. Should Binance be revealed, Binance threatened to withdraw the offer.

“I will never act again. I feel hurt, ”said Singhal.

“There aren’t a lot of regulatory frameworks when you’re dealing with cryptocurrencies,” said Simon Treacy, senior lawyer at Linklaters LLP, a London-based law firm.

According to Binance policy, users seeking compensation must file an application with the Hong Kong International Arbitration Center. This is a relatively expensive option for individual victims.

“Binance has made it difficult for users to assert their rights,” said Aija Lejniece, lawyer for the group of victims investors at the law firm Latham & Watkins in Paris. Lawyer Lejniece is looking for ways to help victims get compensation.

Bitter fruits are given to victims

One of the victims of the technical glitch at Binance was Kate Marie, a 59-year-old health technology consultant in Sydney. After consulting materials on YouTube, Marie began entering the cryptocurrency market 10,000 won U.S. dollar. April, the market is positive, Marie deserves 450,000 won U.S. dollar.

“Cryptocurrency gives the poor the same opportunity to make money as the rich,” she said. Only when the market fell did Marie say she had lost 170,000 won U.S. dollar because it is not possible to access Binance to stop the loss. “I feel betrayed,” annoyed Marie.

As regulators around the world wanted to put pressure on Binance, the exchange was reorganized. Binance pulled out of Ontario in June after the Ontario Securities Commission demanded compliance with local securities laws. To deal with regulatory issues. Binance has hired new employees.

Fawaz Ahmed – a 33-year-old Toronto resident – has been in retail full-time since 2020. Hoping to make enough money so his parents can retire and help his siblings go to college, Ahmed has amassed plenty of futures on Binance.

Ahmed owns 1,250 Ethereum worth up to 3 Million dollars. However, when Ethereum slipped on May 19, Ahmed could only watch helplessly as his earnings disappeared from being unable to place orders through the app.

“It was the worst time of my life,” said Ahmed, adding that he felt depressed and was having a hard time leaving home. I don’t dare tell my family that he lost the goods Million dollars.

Phuong Linh

ZING