Binance to Appear in Court Following Class Action Lawsuit from Italian Investor

JAKARTA – The world's largest cryptocurrency exchange company by trading volume, Binance, has to face a class action lawsuit in Italy. Binance will be present at the trial held in the Milan court.

The class action lawsuit was filed in 2021 by a group of Italian and international Binance users who claimed they were harmed by the suspension of the platform at a time when crypto trading was at its peak. For your information, Binance is also being investigated by the General Prosecutor's Office at the Milan Court following complaints submitted by stakeholders.

The plaintiffs who are users of the platform filed for compensation for the suspension of the Binance crypto trading platform last year. According to the lawsuit filed with the court, “the launch of the class action took place at the culmination of the firm's intense activity in the previous months, which allowed, among other things, to highlight the various criticalities of the Biniance platform, bring it to the attention of Supervisory Authorities from various foreign states and Consob,” reported by DailyCoin.

The problem arose when the Binance platform suddenly went offline and locked users' funds on the exchange. As a result, investors lost tens of millions of US dollars because they were unable to change their positions in futures trading.

Not only that, but a similar incident has also been experienced by various other crypto trading platforms in February 2021. For example, Gemini and Kraken, which experienced technical problems due to an increase in trading burden as a result of the news that Elon Musk had invested 1.5 billion US dollars into Bitcoin ( BTC).

Alleged Binance Violations

In the class action lawsuit, Binance is accused of violating the rules in Italy for allowing users there to use leveraged futures trading services on the platform.

Italy's financial regulator warned Binance in July 2021. They warn that Binance is not authorized to provide investment services in Italy. However, in early 2022, Binance agreed to register its services with related parties as a provider of crypto trading services under the supervision of regulators in Italy regarding anti-money laundering regulations.

At the Binance Blockchain Week event held in Paris, Binance founder Changpeng Zhao stated that the important EU Crypto Asset Market (MiCA) rules are “a little tight” on stablecoins. Because the value of the stablecoin is pegged to other assets such as fiat and gold.