Binance is facing a lawsuit from French customers over its advertising on social media. The investors claim that they were defrauded by the marketing practices of the crypto exchange.
Binance accused of providing false service
Customers in France Are Accusing binance Using deceptive marketing tactics to mislead merchants about their service offerings, including an app for mobile devices that does not exist.
According to reutersThe organization using the site has filed a lawsuit with the Paris prosecutor’s office on grounds including “deceptive commercial practice”.
The lawyers refrained from disclosing the names of the Binance users who filed the case in line with privacy laws.
Binance is trying to restore client trust
After a significant downturn in the industry and a rise in customer withdrawals, Binance has been working tirelessly to regain credibility from customers. In May this year, binance has expired Its registration with the French market regulator AMF,
This is not the first time the company has come under fire from executives or disgruntled customers. In March 2019, the company was fined by a Japanese financial watchdog for operating without a license. This gave authorities in Japan and other countries where Binance operates similar concerns about its licensing status.
What will happen next?
French prosecutors will not necessarily launch a formal investigation because of the complaint.
Changpeng Zhao, CEO of Binance, has repeatedly congratulated France for its “pro-crypto” legislation and stated that Binance intends to establish a regional headquarters there for the European market.
Zhao Mediapart quoted news outlet Mediapart as saying that “Binance is not progressing its offerings in France before it is permitted,” which was the first to report on the French complaint.
According to the complaint, as seen by Reuters, Binance ran marketing activities on social media sites such as Instagram and Telegram while it was still awaiting legal registration as a digital financial business with French authorities.
In France, under a local law that took effect in December 2020, unregistered digital financial service providers are prohibited from advertising their services in the country.