Binance France and its parent company have been rocked by lawsuits from 15 French investors alleging misleading business practices. French local media reported that the complaint was made on 14 December. Allegedly, Binance began advertising its crypto services before registering with France’s financial regulator. Here are the details…
Lawsuit against Binance’s French arm
Binance France allegedly violated French law and advertised crypto services before licensing. Binance France and its parent company, Binance Holdings Limited, are being sued by 15 investors in France, according to local media reports. In a complaint filed on December 14, the plaintiffs allege that Binance violated French law by advertising and distributing crypto services prior to registration from the country authorities.
France’s financial market regulator, Autorité des marchésfinanciers, licensed Binance a digital asset provider in May 2022. The license allowed Binance to offer crypto trading and custody services. The complaint details on its social media that the cryptocurrency exchange platform started advertising before it got the license. A Telegram channel called Binance French shared the details of the services offered by the company. Investors point out that the trading firm is promoting UST as a USD-backed token. So they claim that they lost 2.4 million euros due to the collapse of the algorithmic stablecoin USDT.
Binance France responded to the lawsuit
The world’s largest exchange by trading volume is known for its transparency. The company answered questions about the case. He argued that no promotional content was shared in France before obtaining the license. The exchange noted that it includes market risk warnings for all crypto products and addresses concerns about Terra’s stablecoin advertising. Allegedly, plaintiffs claimed to have lost more than 2.4 million euros following the collapse of TerraUSD (UST). Meanwhile, it is claimed that Binance token has announced that it is backed by the US dollar.
The France-based platform argues that Telegram groups are community forums and can be created voluntarily by users. Therefore, the exchange did not engage in promotional activities before the scheduled time. It is worth noting that the complaint also includes a Telegram channel called “Binance French”. It also includes screenshots showing social media activity prior to Binance’s license, including this one.
Binance also addressed questions about Terra stablecoin ads in the country. The company stated that the communication in question was presented about staking with Binance. The exchange also stated that it always includes market risk warnings for crypto products. He noted that this further strengthened his statements. As we reported as Kriptokoin.com, LUNA was shaken by a series of dramatic events in May 2022. The UST, designed to algorithmically protect the pair with the LUNA token and the US dollar, has collapsed. The departure of the US dollar stablecoin resulted in an unprecedented drop in the price of the stablecoin TerraUSD (UST).
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