Binance sued in France by 15 customers

15 French investors have filed a lawsuit against Binance. The world’s largest cryptocurrency exchange is accused of operating in France without acquiring the required permits. In addition, Binance is accused of deceptive business practices as well as scamming for promoting the stablecoin UST which collapsed last May. For the moment, the CEO of Binance denies the accusations, which come at a time when the exchange is going through a difficult situation.

15 Frenchmen take Binance to court

The Binance exchange is going through “difficult” times. In addition to massive withdrawals here and payment claims there, Binance is now facing lawsuits in France. According to information revealed by mediapart a french media, the world’s largest cryptocurrency exchange is being sued by 15 French investors. What are they blaming Binance for?

Well, according to the complaint document, the 15 investors accuse Binance of three violations of the law:

  • Violation of the digital asset service provider (DASP) monopoly;
  • Deceptive Business Practice;
  • Concealment of fraud.

Regarding the violation of the monopoly of digital asset service providers (DASP), Binance is accused of having started to promote its activities to the French public while the company did not yet have a DASP registration as required by French law.

Indeed, Binance filed an application for registration as a digital asset service provider in December 2020. The exchange finally obtained this registration only in May 2022.

While it did not yet have its PSAN registration, Binance was already advertising explicitly to the French public, the plaintiffs claim. To support this accusation, the plaintiffs produced screenshots from Binance’s social networks.

In addition, the complaint document also refers to the accusations of deceptive commercial practices and concealment of fraud. Binance is accused of having promoted the UST stablecoin, which collapsed last May, causing huge losses for its holders.

According to some sources, the 15 plaintiffs suffered the collapse of the USD and lost up to 2.4 million euros.

Once again, the plaintiffs have shared screenshots to support their accusations. In one of them, for example, you can see a poster of Binance talking about its 19.62% staking of the UST. UST is even presented by Binance as a “safe and happy earn”.

binance affiche staking ust
Staking of the UST

CZ’s response to the accusations against Binance

The CEO of Binance responded to the accusations made against his exchange by the 15 French investors. Unsurprisingly, Chang Peng Zhao believes that Binance did not operate in France until it was legally authorized to do so. For him, the Telegram Binance French group is just a simple trading forum.

Binance did not promote in France until it was allowed to do so. Telegram groups are global community forums, which any Telegram user can create or join voluntarily.

CZ, CEO of Binance

Based on the plaintiffs’ screenshots, it is possible to say that Binance shared content about its services in French on Instagram and in a Telegram group called Binance French. This was also done before the valuable PSAN registration was obtained. The question that arises is this: is this advertising in France? Indeed, let’s not forget that the French language remains one of the most spoken in the world and that it is not only used to target France. Moreover, let’s remember that investments in cryptocurrencies are risky and that Binance did not force anyone to invest, as its terms of use frequently specify. Stay tuned to learn more.