The plaintiffs allege they lost more than €2.4 million in value when TerraUSD crashed.
Binance France addressed the concerns raised by its customers in a blog post.
According to reports in local media, fifteen French investors have filed a lawsuit against Binance France and Binance Holdings Limited for false concealment and deceptive business activities.
Binance was accused of breaking French law on December 14 in a complaint made by the plaintiffs. The complaint said that the exchange had advertised and distributed cryptocurrency services before acquiring registration from French authorities.
It was reported that in May of 2022, Binance got a digital asset provider license from the French financial market regulator, the Autorité des marchés financiers. Because of this license, the crypto exchange may provide services including asset custody and crypto trading.
Binance Addresses Concerns
Some of Binance’s pre-licensing social media activity is allegedly documented in the lawsuit, including the creation of a “Binance French” Telegram channel. While Binance promoted the TerraUSD (UST) token as being backed by the U.S. dollar, the plaintiffs allege they lost more than €2.4 million in value when it crashed.
Binance France addressed the concerns raised by its customers in a blog post. It states that throughout the relevant time period the firm did not engage in any promotional activities in France and that “Telegram groups are global community forums,” enabling users to set up and join channels on the platform based on their own will.
Binance also responded to concerns over the promotion of Terra stablecoin inside the nation. The exchange stated that the firm’s marketing makes it seem that staking with Binance is “safe, and not the underlying tokens.” Furthermore, the exchange highlighted that it has improved its descriptions and will always offer market risk warnings for crypto items.