Binance Sued By French Investors For Over 2.4 Million Euros In Losses

Key Points:

• Binance France and Binance Holdings Limited are being sued for alleged fraudulent concealment and deceptive business activities.
• The plaintiffs also claim to have lost over 2.4 million euros as a result of the TerraUSD (UST) collapse, because Binance advertised the token as US dollar-backed.

According to local media sources, Binance France and its parent firm, Binance Holdings Limited are being sued by 15 French investors for alleged deceptive business practices and fraudulent concealment.

The plaintiffs stated in a case filed on December 14 that the exchange breached French regulations by promoting and delivering crypto services before acquiring registration from the country’s authorities. As Coincu reported, the Autorité des marchés financiers in France awarded the exchange a license as a digital asset supplier in May 2022. The license enables the crypto exchange to provide services including asset custody and cryptocurrency trading.

The accusation also comprises photos indicating Binance’s social media activities previous to its licensing, including a Telegram channel titled “Binance French”. The plaintiffs also claim to have lost over 2.4 million euros as a result of the TerraUSD (UST) collapse, because Binance advertised the token as US dollar-backed.

The exchange reacted to inquiries about the case in a blog post. According to them, the business did not undertake any promotional communications in France during the relevant period and stated that Telegram groups are worldwide community forums, allowing users to build and join channels on their own terms.

The exchange also addressed concerns about Terra stablecoin advertising in the nation. The firm stated that their communication portrays staking with Binance as safe, and not the underlying tokens. The exchange also stated that it always contains market risk warnings for crypto goods and that its explanations have been enhanced.

As reported by Coincu, a sequence of dramatic events in May 2022 led to a dramatic drop in the price of the LUNA token and its associated stablecoin TerraUSD (UST), which was supposed to preserve algorithmic parity with the US dollar but lost its peg and fell to $0.2700.

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