An unnamed European-based investor has initiated ICC Arbitration proceedings against Binance Exchange, the world’s largest digital currency trading platform by volume for what is described as unjust liquidation of his assets. According to sources close to the matter, the investor is now seeking a $140 million compensation.
The fact that Binance has no defined headquarters was not enough to stop the investor from proceeding with the ICC Arbitration filing. As reported, the claim was directed to over 45 entities around the world with connections to the Binance exchange. The proceedings have now officially begun in Switzerland after months of deliberation.
ICC Arbitration is the go-to resolution center in legal matters that span across countries. In arbitration, one arbitrator represents the claimant, another represents the defendant, and an independent arbitrator is also appointed to constitute a three-man panel.
The exact claim by this user is centered on the exchange’s auto liquidation system, which the investor said Binance has a conflict of interest in his own case. While other exchanges including BitMEX have experienced these liquidations in the past, the European Investor claimed that the system allegedly liquidated a large amount of his coin against his wish. While the proceedings have begun, there is no defined timeline for the lawsuit to span, and the dynamics of the ICC Arbitration will be deciphered as the case progresses.
European Investor Filing is A Common Legal Filing Amongst Exchanges
As an outfit that deals with people’s money, trading platforms are often slammed with lawsuits every now and then. While the ICC Arbitration claim by the European Investor is quite unusual, lawsuits are common amongst trading platforms and Binance has been in the crosshairs in recent times.
The outage from the exchange when the price of Bitcoin and the broader digital currency industry slumped back in May may come off as more damning for the trading platform than anticipated. As reported by TheCoinRise, an organized group of crypto traders sued Binance for this outage, stating that they suffered as much as $20 million combined.
Per the report, the Swiss litigation finance group Liti Capital committed over $5 million to help the traders fight an international arbitration case against Binance, with New York law firm White & Case set to represent those affected. The filing was announced back in August.
Lawsuits can be damning for exchanges, and systems that can guarantee investor protection against similar outages, as well as the volatile nature of cryptocurrencies remains the center point of the regulatory sweep that is hovering over trading platforms today.
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