An unnamed European investor noted that Binance liquidated his crypto holdings in a specific coin without his own interests. The investor is now seeking $140 million in compensation from the crypto exchange.
It seems like the regulatory proceedings against Binance won’t be ending anytime soon. A wealthy and unnamed European investor has initiated ICC proceedings against the world’s largest cryptocurrency exchange. As per sources familiar with the matter, the investor claims that Binance has unjustly liquidated his funds last year in November 2020. As a result, he’s now seeking compensation of more than a staggering $140 million.
European Investor vs Binance
Further, The Block reported that the proceedings are already underway in Switzerland after months of negotiations. Besides, the claim has been directed to more than 45 entities across the world connected to Binance.
The claim basically stays around Binance’s automated liquidation system. It notes that the exchange forced the investor to sell large amounts of specific crypto against his own wishes. The investor also claims that Binance holds a conflict of interest in the liquidation.
The ICC arbitration rules specifically apply to cases involving cross-border disputes. With arbitration proceedings, each side picks one arbitrator along with a third independent one put in place. Thus, instead of a typical lawsuit involving the judge and the jury, the three arbitrators resolve the case.
Over the last few months, crypto exchange Binance has been facing a flood of accusations and regulatory charges. Much similar to this case, Binance is also facing charges from its own users. A group of six investors is planning to sue the exchange over the outage on Binane on May 19, 2021. It was the same day that the BTC price dropped drastically. This group is now claiming $20 million in compensation. A 1000 other people have joined the group to sue the exchange.
Binance’s Regulatory Troubles
Binance, the crypto exchange with no global headquarters, is facing severe regulatory challenges worldwide. Binance is the world’s largest crypto exchange in terms of trading volumes.
Regulators from some of the top economies have slapped charges on Binance for not following the rules of the land. This includes regulators from the UK, the US, the EU, Japan, and several other East Asian countries.
One of the biggest concerns with the regulators is that Binance doesn’t have an official headquarter. Explaining the reason for the same, Binance said that it prefers to have a decentralized structure of working. In his recent interview last month with the South China Morning Post, Binance CEO Changpeng Zhao said:
“Four years ago when we started it, we wanted to embrace the decentralized model so we wanted to have decentralized teams everywhere. But we do run one centralized exchange, which is the biggest part of our business. Now we have come to realize that for the regulators, we need to be centralized”.
However, Binance is initiating key measures to comply with the regulatory requirements. Binance CEO Zhao said that the exchange is focusing on regulatory compliance as it ‘pivots from a technology start-up into a financial services company’.
Binance is also strengthening its compliance and legal teams by hiring more staff in this regard.
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