Traders demanding compensation from cryptocurrency exchange Binance for a crash during the cryptocurrency turmoil earlier this year have secured financial backing.
Swiss litigation finance group Liti Capital has pledged at least $ 5 million to fund an international arbitration against Binance in Hong Kong. White & Case, a major New York-based law firm, will represent investors, the Financial Times reported.
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An initial group of six investors from countries such as Ukraine, Australia, France and the United States said compensation should be at least $ 20 million. In addition, they hope to attract several hundred more traders.
The lawsuit will test whether the burgeoning cryptocurrency exchange, which operates through a complex global network of legal entities and does not have an official headquarters, can withstand legal complaints from its clients.
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The Cayman Islands-based crypto exchange Binance is one of the largest players in the digital asset industry. It is increasingly facing mounting pressure following a string of regulatory complaints.
In particular, the authorities in the UK, Hong Kong and Japan have commented on the company’s anti-money laundering practices.
Ukraine has lost its leadership in the world in the use of cryptocurrencies
Binance and its CEO Changpeng Zhao have pledged to tighten regulatory compliance procedures and work more closely with financial supervisors in the countries where the crypto exchange provides its services.
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