The Steering Committee formed by the alleged victims of the May 2021 Binance outage collaborates with Swiss-based Liti Capital: the equity firm will support the claims process with funding.
Binance may be sued by traders: campaign curated by Liti Capital (LITI)
Amidst an unmatched drop in cryptocurrencies capitalization in mid-May, many top-tier exchanges went down for hours. As covered by U.Today, Coinbase, Gemini, Binance Futures and leading crypto prices tracking dashboard CoinMarketCap went offline on May 19, 2021.
For many traders—from derivatives platforms in particular—the temporary loss of access to their funds resulted in painful losses. Largely, users were unable to sell the assets that were bleeding and to close their long positions. In total, more than 700 known traders experienced problems with access to Binance during the hours of outage. As per some estimations, thousands of traders may have lost more than $100 million in equivalent.
Liti Capital is providing the financing to @BinanceClaim to help the traders who lost millions on the @binance exchange seek justice.— Liti Capital (@LitiCapital) August 20, 2021
Find more here https://t.co/ytjFmJNYLP#binance #thedaybinancefroze #wLITI #LITI #BNB #Cryptocurency #Blockchain #ActionAgainstFUD #cryptotrading pic.twitter.com/8wHgAjnzUT
Affected traders decided to elect a Steering Committee to protect their rights and try to make Binance cover their losses. As of Q3, 2021, the Steering Committee includes attorney Ms. Aija Lejniece and high-profile trader Fawaz Ahmed, who allegedly lost $3 million due to the ignorance of the Binance team during the outage. Mr. Ahmed reported that he tried to close his positions 70 times, but the exchange did not respond.
The activity of the Steering Committee is coordinated by David Kay, executive chairman and chief investment officer of Liti Capital. It is Liti Capital (LITI) that provides the funding and support for this massive initiative. Liti Capital appointed international law firm White & Case LLP to represent the traders in the litigation procedure. Hearings will take place at the Hong Kong International Arbitration Centre; basic expenses per applicant surpass $65,000.
Liti Capital (LITI) will spend about USD 5 million to support the positions of claimants in this case, Mr. Kay shares. This litigation financing equity fund adheres to a novel tokenized model - its LITI tokens, which are actually equity shares that pay out dividends to holders when a case is won, can be exchanged for a wrapped version. The wrapped wLITI tokens are then tradable on centralized exchanges such as HitBTC and Bitcoin.com as well as decentralized exchanges such as Uniswap (UNI).
Community of claimants is looking for more traders
According to statements shared by Liti Capital, it seeks other traders who were affected by Binance outage issues.
In an aggressive campaign, Liti Capital stresses that any trader can submit his/her claim at zero cost after simply filing a form that takes about five minutes. Liti Capital runs a special "Binance Claim" webpage and introduced a new, semi-ironic "HODL Binance accountable" motto.
In turn, a Binance representative told media outlets that the team of the world's largest exchange always covers losses that occurred due to technical issues. At the same time, "hypothetical" losses do not count:
We do not cover hypothetical "what could have been" situations such as unrealized profits.
Also, Binance officers emphasized that availability issues affect the entire industry, so no wrongdoing was done on the part of Binance itself.