Photo: Bitcoinist

700 Cryptocurrency dealers seek damages over losses incurred in Binance service outage

*Affected crypto traders claim by the time service was restored after the outage on the Binance exchange May 19, 2021, several investors discovered that their accounts had been emptied

Alexander Davis | ConsumerConnect

In view of the crypto traders’ loss of millions of Dollars due to a May 19 outage on the company’s exchange, over 700 cryptocurrency traders are seeking compensations after Binance, the world’s largest digital currency exchange by volume, based in Canada, suffered a major service outage May 19, 2021.

The incident led to significant losses for many traders, agency report said.

Canadian cryptocurrency trader Fawaz Ahmed in an interview said: “This loss was not fair.

“This is something which was out of my control.”

Report indicates that several hundreds of investors are now pursuing a formal claim against Binance.

The traders allege that the outage the platform suffered caused millions in damage.

The service disruption happened to coincide with a steep decline in the price of Bitcoin. Traders found that they were unable to close their position in order to avoid losses.

By the time service was restored, many traders discovered that their accounts were emptied.

Losses as large as $12 million were cited in the legal claim, according to report.

The level of compensation offered by the platform was “absurdly” low, according to Ahmed.

If the legal action is successful, the exchange will have to pay out-of-pocket to compensate affected people.

However, it was gathered that the firm would also have to accept a higher level of liability to investor claims going forward.

However, in regard to the widespread outage, Binance has pointed out that it was not the only crypto exchange to experience a service disruption May 19.

A company Spokesperson told The Verge: “On 19 May, nearly all cryptocurrency exchanges suffered temporary outages due to extreme market volatility.

“At Binance, we took immediate steps to engage with users affected by the outage, and we worked quickly to restore trading.”

The spokesperson asserted that Binance’s policy is “fair” in that it compensates users who “experienced actual trading losses due to our system’s issues.”

“We do not cover hypothetical ‘what could have been’ situations, such as unrealised profits,” said the representative.

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