An Unconventional New Legal Claim is being Faced by Binance over the May 19th Outage hence disgruntled users are taking their case to international arbitration. There is a group of disgruntled investors pursuing a formal claim against the cryptocurrency platform (Binance) for allegedly causing millions in damages via an unanticipated outage earlier this year.
This new legal claim was filed in an international business arbitration court. The case in question represents the largest investor action ever brought against a cryptocurrency platform and a major test of the rights of investors speculating in digital currency markets.
An Unconventional New Legal Claim is being Faced by Binance over the May 19th Outage
While Binance wasn’t the obey platform affected, the case stems from a wide spread service outage that happened on May 19th. This widespread service outage, unfortunately, coincided with a massive drop in the price of Bitcoin. As a mass selloff clogged blockchain transactions and overwhelmed reserves, the complex financial products offered by Binance made the damage done particularly severe.
By the time the issue was resolved, so many futures and leverage traders on the platform had seen their entire account automatically emptied. These traders mentioned that if Binance had been capable of filling orders, they could have sold off before their holdings became worthless.
How Many Users were Affected by The May 19th Outage?
According to The Verge, the unanticipated outage that happened on the 19th of May 2021 is said to have affected over 700 people. Early participants in the new action include losses as large as 12 million dollars and if the action is successful Binance is going to have to make up for those losses out of their own pockets. They are also going to have to accept a higher level of liability to investor claims going forward.
The losses experienced by users of the platform seem to be more severe than they look. One of the new participants in the new action (an investor by the name of Fawaz) mentioned that he tried to close his position as early as noon on the 19th of May 2021 however, the platform failure (unanticipated outage) made it impossible.
In a statement provided to reporters by Fawaz, he said “I tried to click that close position button more than 70 times but it never worked. Eventually, my position got fully liquidated”. All said and done Mr. Fawaz believes that he lost 6 million dollars because of the downtime.