A new scandal hits Binance!

This end of year is undoubtedly one of the most rocky periods for Binance. After the scandal involving its Proof of Reserves, another issue has plunged the crypto platform into an unprecedented crisis. Indeed, 15 French investors have decided to sue Binance France and its parent company Binance Holdings Limited. The exchange is accused of deceptive practices and fraudulent concealment.

The plaintiffs claim Binance violated French law by advertising and distributing crypto services before receiving registration. https://t.co/Ht8yD3z8va

— Cointelegraph (@Cointelegraph) December 25, 2022

15 French investors file a lawsuit against Binance

A group of 15 French investors has decided to take Binance France and its parent company Binance Holdings Limited to court. The plaintiffs accuse the exchange of suspicious practices, to say the least. The complaint was made official on December 14. In substance, the exchange allegedly violated the regulations in effect on French soil.

Advertising and distributing crypto services without prior registration with 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 decried facts are prior to that date. With the French license, the platform could therefore allow custody of crypto assets and trading of cryptocurrencies. To support their complaint, the plaintiffs use screenshots to justify Binance’s activities on the Internet before being registered. The plaintiffs are now demanding about 2.4 million euros from the platform. They would have lost this amount following the collapse of TerraUSD (UST), a token that Binance announced to be dollar-backed.

The exchange refuted the accusations in a blog post by answering some questions. The crypto platform denies any promotional activity prior to obtaining the registration. Given that the accusations also include the Telegram group, the platform believes that the forum involves all users worldwide and not just the French community. Moreover, Binance specifies that joining Telegram groups is done voluntarily and that each user can create one if he wants.

Conclusion

Binance also clarifies that its communication regarding Terra was about staking and not about the underlying tokens. The exchange also points out that it always includes warning messages about the risks involved with the crypto market. For now, it is difficult to say how far this case will go, but the next few days will be decisive.