Binance is facing a lawsuit from French clients regarding its advertisement on social media. The investors claim that the crypto exchange’s marketing practices tricked them.
Binance is accused of false service offerings
Customers in France are accusing Binance of using deceptive marketing tactics to mislead traders regarding their service offerings, including having an app for mobile devices that do not exist.
According to Reuters, the organization that used the site has filed a lawsuit with the Paris prosecutor’s office on grounds including “misleading business behavior.”
The attorneys refrained from disclosing the names of the Binance users who filed the case in conformity with privacy laws.
Binance is trying to restore client’s trust
Following a significant slump in the industry and a spike in customer withdrawals, Binance is working tirelessly to regain credibility from clients. In May this year, Binance finished its registration with the French market regulator AMF.
This incident is not the first time the company has come under scrutiny from authorities 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 inquiry due to the complaint.
The CEO of Binance, Changpeng Zhao, has frequently complimented France for its “pro-crypto” legislation and has stated that Binance intended to establish a regional headquarters there for the European market.
Zhao was quoted by the news outlet Mediapart as saying that “Binance has not been pushing its offers in France before it was allowed to,” which was the first to report on the French complaint.
According to the complaint, as viewed by Reuters, Binance ran marketing activities on social media sites like Instagram and Telegram while its legal registration as a digital financial business with French authorities was still waiting.
Under local law that took effect in France in December 2020, unregistered digital financial services providers are prohibited from advertising their services in the country.
Wayne Jones
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