According to their attorneys, a group of French crypto investors has filed a criminal case against Binance, alleging the world’s largest crypto exchange of deceiving the public and marketing its services before it was legally entitled to do so.
Clients of the platform, the organization has filed a case with the Paris prosecutor’s office on grounds of “misleading business practice,” attorneys Etienne de Dreuille and Baptiste Bonhomme told Reuters via phone.
The prosecution office had no immediate response, and Binance did not respond to Reuters’ emails or phone calls.
Binance is fighting to restore trust after a rise in client withdrawals as a result of a huge sector collapse.
According to a Reuters investigation of Binance’s corporate records, the core of the firm – the massive Binance.com exchange, which has completed deals worth more than $22 trillion this year – is mainly concealed from public view.
The filing of a complaint does not inevitably result in the opening of a formal investigation by French prosecutors.
Binance has already stated its desire to establish a regional center in France for the European market, and Binance CEO Changpeng Zhao has frequently complimented France’s “pro-crypto” laws.
According to the lawsuit, Binance ran marketing activities on social media sites such as Instagram and Telegram while its legal registration as a digital financial business with French authorities was still pending.
Binance registered with France’s AMF market watchdog in May of this year.
According to the complaint, a French regulation that went into effect in December 2020 prohibits unregistered digital financial services companies from marketing their business in France.
The attorneys did not provide the identities of the Binance customers who filed the case, citing privacy laws.
News website Mediapart which first reported on the French complaint cited Zhao as saying that “Binance has not been promoting its offers in France before it was allowed to”.
Binance has promoted itself internationally, hiring hundreds of “Binance Angels” as volunteers from across the world to promote the exchange on social media to local crypto traders.
Source – Reuters
