According to local media reports, Binance France and its parent company Binance Holdings Limited are being sued by 15 investors in France for alleged deceptive business practices and fraudulent concealment.
In a complaint filed Dec. 14, plaintiffs alleged that Binance violated French laws by promoting and distributing crypto services before it was registered by the country’s authorities. As Cointelegraph reports, the French financial markets regulator Autorité des marchés financiers granted Binance a license as a digital asset provider in May 2022. The license allowed the crypto exchange to offer services like asset custody and crypto trading.
The complaint reportedly includes screenshots showing Binance’s pre-licensing social media activity, including a Telegram channel dubbed Binance French. The plaintiffs also claim to have lost over $3.0 million following the collapse of TerraUSD (UST) while Binance promoted the token as US dollar-backed.
Related: France may require crypto platforms to obtain licenses
In a blog post, Binance France answered questions about the case. According to them, the company did not carry out any promotional communications in France during the period in question, noting that “Telegram groups are global community forums”, which allow users to create and join channels voluntarily.
Binance also addressed questions about the Terra stablecoin promotion in the country. The company noted that its notice presents staking with Binance as “secure and not the underlying tokens.” The exchange also noted that it always includes market risk warnings for crypto products and has continued to strengthen its descriptions.
As Cointelegraph reported, a series of dramatic events in May 2022 led to an unprecedented drop in the price of the LUNA token and related stablecoin TerraUSD (UST), which was designed to maintain algorithmic parity with the US dollar but lost the peg and toppled below $0.30.