São Paulo forced Binance and B Fintech to return just over $1,000 to an affected user in January last year. Binance ignored the calls of local judges until the city court forced it to restore the damage to Irapuan Paulino Leite. For Brazil, Binance is responsible for having “hosted” the affected party’s assets, in addition to being the owner of the user’s data.

The 9th Civil Court of the Regional Forum of Santo Amaro de São Paulo, Brazil, sued the world’s largest exchange, Binance, and its local partner, B Fintech, to refund the “stolen” BTC to a client, immediately. The person affected is called Irapuan Paulino Leite.

Brazil asked Binance to refund the BTC to a user who was stolen in January last year with a fraud. Last year, local judges invited Binance and B Fintech to pay back the damage, but with no response, a court in São Paulo went back on grounds and forced the exchange to return the funds.

Brazilian Court Accuses Binance of Encouraging the Case and Postponing the Return

The companies had to return $1,000, or 0.03265900 BTC. However, Binance alleged “illegitimacy” and invalidity of the subpoena. He even stated that B Fintech is not a subsidiary of the exchange in Brazil or a legal representative, to which the judges replied that it is “notorious” that Binance promotes its operations in the country through FinTech.

Binance previously alleged that the fraud was perpetrated on the affected party’s computer and that “it could not be held responsible” for the lack of caution of Irapuan Paulino Leite. The exchange argued that the assumptions of civil liability “are not met”, and initially challenged the moral damage claimed. The court responded to Binance as follows:

“Binance and B Fintech belong to the same economic group. It is a notorious fact that the first defendant carries out its operations in Brazil for the middle of the second row. Therefore, it becomes a legitimate party to integrate the legal-procedural relationship, based on the fact of the service, once constituted for the development of its business activities in the country.”

For Brazil, Binance is responsible for having “hosted” the affected party’s assets, it is the owner of the user’s data, which would have been tracked. In addition, the judge required a certain degree of “sensitivity” and abandoned traditional positions to understand the case. In addition to the above, the exchange would have refused to provide the necessary documents to support its defense.

For Brazil, Binance “the defendants are responsible for the damages caused to consumers in the provision of their services.” The author would also have requested compensation for non-material damage and the magistrate understood that non-compliance constitutes only a “daily nuisance”.

Lawsuits Against Binance Become Commonplace

Binance has experienced all kinds of accusations in recent months, from the United States Securities and Exchange Commission (SEC) for “inflating” its trading figures, to being accused of listing securities. Recently, the Department of Justice announced that it has assessed sanctions against Binance for fraud, including fines and deferred or non-prosecution agreements.

The Department of Justice fears creating a scandal with the accusations or massive transfers by its users and creating chaos similar to what happened with FTX. The dilemma persists that cryptocurrency companies take advantage of “grey areas” that allow them to provide the minimum protection to users.

By Audy Castaneda


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