Binance France hit by lawsuit of €2.4 million by investors accusing the exchange of violating French law

  • A lawsuit for violation of French law hits Binance France and Binance Holdings Ltd. 
  • The lawsuit alleges that the exchange platform violated the law by advertising and distributing crypto services before receiving registration. 
  • French investors allege that Binance France engaged in misleading commercial practices and fraudulent concealment. 

Binance France and its parent company are being slammed with a lawsuit by 15 French investors who allege the exchange of misleading commercial practices. The French local media reported the complaint that was filed on December 14. Binance started advertising its crypto services before receiving its registration from France’s financial regulator. 

Also read: Binance auditor Mazars suspends proof-of-reserves services for all crypto exchanges, here’s what this means

Binance France allegedly violated French law, advertised crypto services before obtaining license

Binance France and its parent company Binance Holdings Limited are being sued by 15 investors in France, according to local media reports. In a complaint filed on December 14, plaintiffs claim that Binance violated French laws by advertising and distributing crypto services before receiving registration from the country's authorities. 

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 Binance to offer crypto trading and custody services. The complaint details that the cryptocurrency exchange platform started advertising on social media before receiving the license. A Telegram channel dubbed Binance French shared details of services provided by the firm. 

The investors claim that they lost €2.4 million to the collapse of algorithmic stablecoin USDT since the trading firm advertised it as a USD-backed token. 

Binance France responds to €2.4 million lawsuit

The world’s largest exchange by trade volume is known for its transparency. The company responded to questions on the case and argued that no promotional content was shared in France prior to receiving the license. The exchange noted that it included market risk warnings for all its crypto products and addressed Terra’s stablecoin advertisement concerns. 

The France-based platform argues that Telegram groups are community forums and can be created by users voluntarily. Therefore the exchange did not engage in promotional activities ahead of the scheduled time. 

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