As per the latest developments, a new $100 million arbitration case against cryptocurrency exchange Binance is being actively discussed around the crypto communities, in which over 1,000 traders demand restitution for losses sustained during the site&39s downtime on May 19th, 2021.
Binance had experienced technical difficulties for hours on end on that aforementioned date during one of the biggest market crashes of the year, with the entire cryptocurrency market falling by 33%. Traders were not able to make deals during Binance&39s downtime, and many saw their accounts emptied when the site finally reopened.
Binance&39s click-through terms of service relieve the exchange of all liability for losses suffered by new users after registering with the exchange. The firm does not have a formal headquarters and is not regulated or registered.
Hiding Under the &lsquoDecentralization' Umbrella?
David Kay from Liti Capital claimed Binance had used the term &lsquodecentralized' to great success during its tenure as the world&39s biggest cryptocurrency exchange, but solely to advance its own goals. &ldquoBinance attempts to disguise itself as a communal asset, which it is not," he added. &ldquoIt is a corporation that makes use of community resources. To that end, it has done an excellent job of blurring the borders and enveloping itself in the concept of decentralization."
David claimed that Binance used the concept of decentralization to create dividing lines in the cryptocurrency community through cultivating an in-group/out-group mindset, stating that Binance does not in fact have any official headquarters, nor is it actually regulated (although its CEO Changpeng Zhao has stated that he wants to change this soon by working with global regulatory institutions). David believes that if any such entity is against the crypto community, then it is essentially against decentralization itself.
&ldquoWe are not &lsquoanti-Binance'"
David wanted to clarify that despite what has happened and been said, Liti Capital is not actually anti-Binance. &lsquoWe support the notion that Binance can still be beneficial to the community. This situation mainly concerns the reality that we all make errors, but those faults must be corrected eventually. As such, there is no desire to ruin Binance, but this glaring issue needs to be acknowledged and corrected," Kay explained.
David recently spoke on the CryptoWeekly Podcast where he explained that while cryptocurrencies must remain largely unregulated due to their nature and the fact that government intervention will only stifle the industry's growth, centralized exchanges such as Binance which directly profit off of its consumers must be regulated and routinely checked.
Liti Capital will be paying for the arbitration in advance and shall additionally be reimbursed with a portion of the damages awarded if the procedures are decided in the claimants&39 favour.