fbpx

More Trouble for Binance, But This Time It’s from the Users

  • Binance has a wave of legal battles coming its way, with Liti Capital leading the charge in a move that is the first of its kind.
  • Liti Capital has pledged to commit $5 million in pursuit of the case against Binance in exchange for a 30% cut of the realized amount.
  • Binance has beefed up its customer verification requirements amid sustained regulatory crackdown against the exchange.
  • The new requirements involve facial verification in order for customers to attain intermediate status.

Binance has been hounded by regulatory agencies worldwide which has led to its operations being stifled in certain jurisdictions. Yet, the tribulations of the market’s largest exchange may get worse with Liti Capital set to finance a group action lawsuit against it for several infractions committed against its customer base. 

In the meantime, Binance is frantically trying to comply with regulatory requirements by introducing facial verification for its customers and requiring the submission of government-issued IDs in order to attain access to the full range of services.

Brace Yourself, Binance!

Binance’s users are instituting a massive lawsuit against the cryptocurrency exchange, primarily for  the freezing of accounts during the liquidations of May 19th, which led to losses running into millions of dollars. 

The Binance case will be brought forward at the Hong Kong International Arbitration Centre, with the total cost of litigation being covered by Liti Capital, a litigation finance firm.

This means that Liti Capital will handle all the fees related to the case in exchange for a percentage of the award if the lawsuit is successful. For example, in the case against Binance, Liti Capital will take 30% upon resolving successful litigation after pledging at least $5 million for the case. 

Speaking on the suit, the company’s chairman, David Kay, noted that this is a first-of-its-kind case because Binance has “no regulators, headquarters or offices,” which makes it difficult for consumers to interact with them. 

Traders that were harmed by the actions of Binance who wish to take part can register their interests on Liti Capital’s platform. The number of known persons affected by the May 19th incident comes to over 700, and this total could increase into the thousands.

Liti Capital Is Changing the Landscape

Liti Capital is flipping the script for litigation finance, bringing it into the purview of regular investors by leveraging blockchain technology. By launching the LITI and wLITI tokens, investors can partake in the litigation finance market with minimal, high-yield investments with tokens that are easily liquidated.

For plaintiffs, the firm offers a way to follow a case to its logical conclusion and enforce the judgment debt without the onerous burden of financial obligations.

On The Flipside

  • The outcome of the case against Binance remains uncertain, and it remains unclear where the pendulum will swing.
  • Claimants can only hope that the case’s ruling goes in their favour as it is expected that Binance will put up a firm defence.

Binance Fixes Up Its House

In light of mounting regulatory pressure, Binance has introduced new requirements for its customers. The requirements will require all new customers to submit a government-issued ID, and carry out facial verification before being able to access the services on the platform. 

Old customers will have to upgrade to the new requirements, or risk having their services limited to withdrawals and other ancillary services.

This move is an attempt by the exchange to improve its standing in the eyes of regulatory agencies after being hounded by leading financial regulators in the UK, Netherlands, and Japan in recent months. The exchange has also indicated a willingness to work with regulators on anti money laundering concerns.

Why You Should Care?

Binance is currently the world’s largest crypto exchange. If Binance fails to pull through this regulatory crisis, it could result in more crypto exchanges emerging to take its place, especially those which are more regulated. 

EMAIL NEWSLETTER

Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

    You can always unsubscribe with just 1 click.

    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

    Rate This Article
    In order to improve, we give you the opportunity to rate DailyCoin content
    Author

    Milko Trajcevski has been in the crypto world for years, and as such has gathered both a skill for writing as well as a native prowess when it comes to understanding everything that occurs within that world. Through skilled writing and determination, he covers articles about cryptocurrency, tokens, blockchain, crypto-asset regulations, crypto wallets, exchanges, liquidity, DApps, forks, mining, security, and blockchain technologies. He is a professional with a track record of proven expertise within the crypto space.