Binance France and its parent company Binance Holdings Limited are being sued by 15 investors in France for allegedly deceptive business practices and fraudulent concealment. according to to local media reports.
In a complaint filed on Dec. 14, the plaintiffs claimed that Binance violated French laws by advertising and distributing crypto services before receiving the registration from the country's authorities. As Cointelegraph reported, France's financial market regulator, the Autoritรฉ des marchรฉs financiers, has granted Binance a license as a provider of digital assets in May 2022. The license allowed the cryptocurrency exchange to offer services such as asset custody and cryptocurrency trading.
The complaint reportedly contains screenshots showing Binance's social media activity prior to its license, including a Telegram channel dubbed "Binance French." The plaintiffs also claim to have lost more than โฌ2.4 million following the collapse of TerraUSD (UST), while Binance advertised the US dollar-backed token.
Related: France May Force Crypto Platforms to Obtain Licenses
In a blog post, Binance France answered to questions about the case. According to him, the company did not carry out any promotional communication in France during the period in question, noting that "Telegram groups are global community forums", allowing users to create and join channels voluntarily.
Binance also addressed questions about Terra Stablecoin's advertising in the country. The company noted that its communication presents staking with Binance as โsafe, and not the underlying tokens.โ The exchange also noted that it always includes market risk warnings for crypto products and has further strengthened its descriptions.
As reported by CointelegraphA series of dramatic events in May 2022 resulted in an unprecedented drop in the price of the LUNA token and its associated stablecoin TerraUSD (UST), which was designed to maintain algorithmic parity with the US dollar, but lost its peg and became it plunged to below $0.30.
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