15 French Crypto Investors File Charges against Binance Alleging Misleading Practices in € 2.4 million Losses
Binance France is facing charges following the complaint of 15 investors accusing the crypto exchange of misrepresentation, fraud concealment, and misleading commercial updates.
The court documents submitted by the attorney representing the 15 crypto investors allege Binance Holdings Limited and Binance France misled their clients through misrepresented commercial advertisements. Further, the plaintiffs’ attorney submitted that Binance contravened French laws by offering crypto services before satisfying the registration and legal requirements.
Misleading Promotional Communication and Business Practices
The December 14 filing claims that Binance conducted promotional activities even before its licensing by the country’s regulator in the financial market – Autorité des marchés financiers. The complainants observed that Binance received a digital asset provision license from the finance market watchdog in May 2022.
The plaintiffs consider that the license legalized Binance’s crypto-related activities, including digital assets custody and trading services. The documents submitted to the court capture screenshots demonstrating Binance engaged in promotional activity across the social media platforms before the exchange licensing. In particular, the complaint furnished the court with screenshots from the exchange Telegram feed named Binance French.
Alleged Fraudulent Practices
The December 14 filings assert that the 15 investors incurred €2.4 million loss following the calamitous TerraUSD (UST) collapse that Binance indicated in their advertisements as a toke backed by the US dollar. The complaint stated that LUNA token price suffered an unprecedented decline in May 2022. Also, the affiliate stablecoin TerraUSD (UST) lost the peg to exchange at $0.30 despite the Binance advertisement portraying its design as capable of maintaining algorithmic parity with the dollar (US $).
Binance Counters Allegations by Plaintiffs
Binance dismissed the allegations in a post countering the filing. Before licensing, the crypto exchange rules out engaging in promotional advertisements in France. It disputed the Telegram communications within the period alleged by the plaintiffs as global community forums where users of various nationalities establish and join voluntarily.
In addition, Binance clarified the plaintiffs misunderstood the Terra stablecoin advertisement. It indicated that it conveyed the communication to portray staking with the crypto exchange as safe and without reference to the underlying tokens’ stability. The blog post restated Binance’s practice of issuing market risk warnings to all crypto products and reinforced them with corresponding descriptions.
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