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Cryptocurrencies: investors file a complaint against Binance France for deceptive commercial practices

Binance France is in the eye of the storm that is currently hitting the virtual currency platforms after fifteen investors were filed for deceptive marketing practices. It refers to facts likely to be qualified as ” violation of regulations applicable to service providers on digital assets (PSAN), deceptive commercial practices and concealment of fraud “said the company’s lawyers, confirming information from Mediapart.

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The interlocutors, fifteen people ” of French nationality aged 25 to 55 “, have, according to their lawyers, suffered a total financial loss of nearly 2.5 million euros, from May 7, during the crash of “ stablecoin ” Earth.

Terra, a cryptocurrency that was advertised as holding steady at the price of one dollar, has ” just collapsed “, recall the advice of the suspects. “All the investors were left with nothing, without any guarantee ”, while the platform presented the value as “ guarantee “, backed by the US dollar, according to the advice of investors.

Binance did not yet have the right communicate and promote » services around these assets

In its defense, Binance claims to include “Always warnings of market risks regarding these assets and disputes having produced misleading communications in a response posted on its website. For the lawyers of the suspects, there is also a problem of compliance with the regulations of the part of the Binance platform: it communicated and disseminated its services when it did not yet have the right to do so, they argue. Binance only obtained the PSAN registration from the Autorité des marchés financiers (AMF) on May 4, 2022, allowing it the custody of digital assets and providing it with the right to communicate and promote its services. The AMF prohibits platforms that have not been transferred registered from operating in France.

The investors’ lawyers say they were able to ” accurately document » violations of Binance, prior to May 2022: the platform notably communicated via Instagram and via a Telegram group named “Binance French”, “created at the initiative of Binance and stamped as the official group” from Binance, according to suspicion. What the company disputes: Binance did not promote in France before being allowed to do so “, Indicates the platform in its response on its website. And Binance French is a “ community group made up of French-speaking users from all over the world “, she adds.

The complaint also, registered on December 14 by the Paris prosecutor’s office, was filed against “any other person” being able to see each other “to reproach for shortcomings ” in this file. The ” stablecoins are cryptocurrencies, like bitcoin. Their transactions are validated by a decentralized register, the blockchain. Their issuers aim to remain at a fixed price against the dollar.

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Binance announced in mid-December that it had suspended withdrawals in USDC, a so-called stable cryptocurrency or “stablecoin”, whose value is indexed to that of the American dollar. In a tweet, she underlined “pPerform a token swap that involves USDC ” Consequently, ” temporarily suspend withdrawals “. In another tweet, Binance boss Changpeng Zhao, a.k.a. CZ, said he observed an uptick in withdrawals in the virtual machine. A token swap consists of exchanging one cryptocurrency for another by charging the maximum transaction fees.

According to cryptocurrency analyst firm Nansen, more than $2 billion had been withdrawn by Binance customers in the past 24 hours, the highest total since June. The implosion of FTX last month has indeed raised fears of repercussions among other big names in cryptocurrencies. CZ, the Chinese-Canadian boss of FTX assured that Binance had “ absolutely » how to survive massive withdrawals from its customers and the company. CZ had also said that he was going to rescue FTX at the beginning of last week, before giving up in front of the magnitude of the task.

(With AFP)