The Wall Street Journal Front Page Report: Tracing May's Crash, Users Seek Compensation from Binance for Losses

The Wall Street Journal front-page reports "Binance Froze When Bitcoin Crashed. Now Users Want Their Money Back.", detailing how user Anand Singhal is taking legal action to seek compensation after suffering losses due to Binance's over one-hour pause during the May cryptocurrency market crash.

Losses Incurred Due to Inability to Close Positions

According to The Wall Street Journal, Anand Singhal, a computer science master's student in the United States, lost his savings of $50,000 within seven minutes during the cryptocurrency market crash on May 19. The reason was that Anand Singhal's leveraged position could not be closed due to more than an hour of downtime on Binance, locking his margin and liquidating his position.

Not only Anand Singhal, but the report also described similar cases of two other users.

Users Unite for Compensation

As Binance does not explicitly disclose its headquarters location, Singhal and 700 other trading users have formed a group to seek compensation with the assistance of a French lawyer. Additionally, a similar group in Italy is also seeking compensation from Binance. Apart from reaching out to the website's customer service, they have also sent letters to 11 possible European addresses where Binance might be located.

Binance Spokesperson: Compensation Measures Taken Immediately

According to reports, a Binance spokesperson stated, "We have taken immediate action to contact affected users and provide compensation." He also mentioned that affected users are encouraged to continue contacting the official channels.

Users Displeased with Compensation Offer

Anand Singhal mentioned that a user friend of his stated that Binance had provided a compensation application. Despite filling out and submitting the form, the response was unsatisfactory. The content offered him three months of VIP status on the platform and required the user to agree not to pursue further action. Reportedly, Singhal was also asked not to disclose the matter, as the agreement would be voided if he did so.

At only 24 years old this year, Anand Singhal expressed, "I will never trade again, this has deeply affected me."

Regulated Online Broker Robinhood Fined Heavily, Cryptocurrency Trading Still Unresolved

In July this year, the Financial Industry Regulatory Authority (FINRA) in the United States announced that online broker Robinhood had systemic regulatory failures, resulting in a $70 million fine and compensation, including a $57 million fine and the company being ordered to pay around $12.6 million in compensation and interest to thousands of affected customers.

These types of securities trading compensation cases fall under the jurisdiction of financial regulatory bodies in various countries. Simon Treacy, a lawyer at Linklaters LLP in London, stated, "But if you are trading cryptocurrencies, there are very few regulatory frameworks available."

Countries Approach Binance, Zhao Changpeng Hopes for Clear Regulations

The United Kingdom, Japan, Thailand, and the Cayman Islands have all called out to Binance this year, demanding it to cease providing unregistered services to local residents.

In response to a series of regulatory notices, Binance founder Zhao Changpeng released an open letter stating that Binance has actively cooperated with regulatory bodies and self-regulated. Zhao Changpeng also mentioned, "We see cryptocurrencies being adopted more widely globally, and clearer regulatory frameworks are needed in different countries. In fact, the more regulations there are, it is a positive sign that the industry is maturing, as this lays a solid foundation for the wider public to safely engage in cryptocurrencies. I believe that in the long term, comprehensive legal and regulatory frameworks will become an essential foundation for making cryptocurrencies indispensable in everyone's daily lives."