Binance France is Sued by 15 Investors in France for Advertising Crypto Before Obtaining an Operating License

Binance ads are in trouble with investors in France. (photo: twitter @LeBinanceFR)

JAKARTA - Binance France and its parent company Binance Holdings Limited are being sued by 15 investors in France on suspicion of misleading commercial practices and concealment of fraud. This is known according to local media reports.

In a lawsuit filed on December 14, the plaintiffs claim that Binance violated French law by advertising and distributing crypto services before receiving registration from state authorities.

As reported by Cointelegraph, French financial market regulator, financier Autorité des marchés, has granted Binance a license as a digital asset provider in May 2022. The license allows crypto exchanges to offer services such as asset storage and crypto trading.

The complaint reportedly contains screenshots showing Binance's social media activity prior to its license appearing, including a Telegram channel dubbed "Binance French". The plaintiffs also claim to have lost more than 2.4 million euros (IDR 39.7 billion) after the collapse of TerraUSD (UST), while Binance advertised the token as a United States dollar-backed token.

In a blog post, Binance France responded to questions about the case. According to him, the company did not carry out any promotional communications in France during the period, noting that "Telegram Groups are a global community forum", thus allowing users to create and join channels voluntarily.

Binance also answered questions about Terra stablecoin advertising in the country. They note that its communications present staking with Binance as "secure, and not the underlying token." The exchange also notes that the ad always includes a market risk warning for crypto products, further amplifying the description.

As reported by Cointelegraph, a series of dramatic events in May 2022 resulted in an unprecedented drop in the price of the LUNA token and its related stablecoin TerraUSD (UST), which was designed to maintain algorithmic parity with the United States dollar, but lost its value peg and plunged below 0.30. US dollars (IDR 4683).