French investors sue Binance after loss of 2.4m euros

French investors sue Binance after loss of 2.4m euros

According to local media reports, Binance France and its parent company, Binance Holdings Limited, have been sued by 15 investors in France for allegedly misleading business practices and fraudulent concealment.

In a December 14 filing of complaints, the plaintiffs allege that Binance violated French law by advertising crypto services without a license by the country authorities. As reported by Cointelegraph, France’s financial market regulator Autorité des marchés financiers licensed Binance as a digital asset provider in May 2022. This license allows the crypto exchange to provide services such as asset custody and trading.

However, the filing reportedly contains screenshots showing the exchange’s social media activity prior to licensing, including a Telegram channel called Binance French. Plaintiffs also disclosed that they lost €2.4 million as TerraUSD (UST) lost its dollar peg. The plaintiffs added that this was due to Binance’s announcement of this token as backed by US dollars.

You may be interested: France may impose licensing requirements on crypto companies

On the other hand, Binance France made some statements on the subject through a blog post. According to Binance France, the company did not make any promotions during the mentioned periods. Binance France also noted that Telegram groups are a global community forum, allowing users to increase participation by voluntarily creating channels.

On the other hand, Binance also addressed questions regarding the Terra stablecoin advertisement in the country. The exchange stated that communications have always been geared towards staking with Binance. Binance also added that it always warns investors of the risks in the market for crypto products.

As noted by Cointelegraph, a series of unexpected events took place in the Terra ecosystem last May. As it is known, Terra’s stablecoin TerraUSD (UST) lost its stable value. The UST was designed to maintain algorithmic parity with the US dollar, but the price fell below $0.30 as it lost its peg. Immediately after this, there was an unprecedented drop in the price of Terra’s native cryptocurrency LUNA.

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