This end of the year is undoubtedly one of the most incredible periods for Binance. After the scandal related to its proof of reserves, another case comes to plunge the crypto platform into an unprecedented crisis. Indeed, a group of 15 French investors have decided to sue Binance France and the parent company Binance Holdings Limited. The charges against the exchange are the alleged use of deceptive practices and fraudulent concealment.
15 French investors file a complaint against Binance
A group of 15 French investors decided to hang out Binance France and its parent company Binance Holdings Limited before the courts. The plaintiffs accuse the exchange of practices that are suspicious to say the least. The complaint was made public on December 14. In essence, the exchange would have violated the rules in force on French soil.
Advertising and distributing crypto services without prior registration from government authorities is a violation. This is exactly what Binance allegedly did according to the 15 plaintiffs. Admittedly, since May 2022, Binance has had the approval of the AMF, but the facts decried are after this date. With its French license, the platform could therefore allow the crypto asset custody and cryptocurrency trading. To support their complaint, the plaintiffs use screenshots to justify Binance’s activities on the internet before obtaining the license. In fact, the plaintiffs are claiming approximately 2.4 million euro to the platform. They would have lost this sum following the collapse of TerraUSD (UST)a token that Binance announced was backed by the dollar.
The exchange refuted the charges in a blog post by answering some questions. The crypto platform denies any promotional activity before obtaining the license. Since the accusations also related to the Telegram group, the platform believes that the forum concerns all users around the world and not just the French. Moreover, Binance specifies that entry into Telegram groups is voluntary and that each user can create one if they wish.
In short, Binance also specifies that its communication with Terra related to staking and not to the underlying tokens. The exchange also reminds that each time, it includes warning messages about the risks involved in the crypto market. For now, it is difficult to say how far this case will go, but the next few days will be decisive.
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