Binance France and Binance Holdings Limited are being sued for deceptive marketing practices and fraudulent concealment.

According to local media, Binance France and its parent company Binance Holdings Limited are being sued by 15 investors in France for allegedly deceptive marketing practices and fraudulent concealment.

In a lawsuit filed Dec. 14, plaintiffs alleged that Binance violated French laws by promoting and distributing crypto services before it was registered by the country’s authorities. As Cointelegraph reported, the French financial markets regulator, the Autorité des Marchés Financiers, granted Binance a license as a digital asset provider in May 2022. The license allowed the crypto exchange to offer services such as asset custody and crypto trading.

The complaint allegedly includes screenshots showing Binance’s pre-licensing social media activity, including a Telegram channel dubbed Binance French. The plaintiffs also claim to have lost more than €2.4 million after the TerraUSD (UST) collapse, while Binance announced that the token was backed by the US dollar.

Related: France could force crypto platforms to acquire licenses

In a blog post, Binance France answered questions about the case. According to her, the company did not conduct any promotional communications in France during the period in question, noting that “Telegram groups are global community forums”, which allow users to create and join channels voluntarily.

Binance also answered questions about the Terra stablecoin promotion in the country. The company noted that its notice presents staking with Binance as “secure, not the underlying tokens.” The exchange also noted that it still includes market risk warnings for crypto products and continued to strengthen its descriptions.

As Cointelegraph reported, a series of dramatic events in May 2022 led to an unprecedented drop in the price of the LUNA token and related stablecoin TerraUSD (UST), which was designed to maintain algorithmic parity with the US dollar. , but lost its tie and fell below $0.30.

Source: CoinTelegraph