French investors sued Binance for over 2.4 million euros in losses

Published at: Dec. 25, 2022

Binance France and its parent company Binance Holdings Limited are being sued by 15 investors in France over alleged misleading commercial practices and fraudulent concealment, according 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 registration from the country's authorities. As reported by Cointelegraph, France's financial market regulator, the Autorité des marchés financiers, has granted Binance a license as a digital asset provider in May 2022. The license allowed the crypto exchange to offer services such as assets custody and crypto 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 over 2.4 million euros following the TerraUSD (UST) collapse, while Binance advertised the token as United States dollar-backed.

Related: France may oblige crypto platforms to obtain licenses

In a blog post, Binance France responded to questions about the case. According to it, the company did not conduct any promotional communications in France during the period in question, and noted that "Telegram groups are global community forums", thus allowing users to create and join channels voluntarily.

Binance also addressed questions regarding Terra stablecoin advertisement in the country. The company noted that its communication presents staking with Binance as "safe, and not the underlying tokens." The exchange also noted that it always includes market risk warnings for crypto products, and has further strengthened its descriptions.

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

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