- Binance in hot waters with French investors over an unlegalized advertisement.
- A 2.4 million euros loss case, Binance responds.
- Binance suspicious activities as of late
- Why the panic from crypto users is expected
The French sector of Binance and Binance Holdings Limited is in hot waters with French investors. It is being sued over an alleged commercial that misled the public and a fraudulent concealment.
15 French investors are suing Binance France and the parent company Binance Holdings Limited over alleged commercial misconduct. The investors filed a complaint claiming that Binance violated French regulations by ordering the advertisement and distribution of crypto services before being registered by the country’s legal authorities.
Binance received the license of a digital asset provider in May of 2022 from the Autorite des Marches Financiers, which allowed the crypto exchange company to offer services like crypto trading and asset custody.
The French investors, however, included in their complaints evidence of Binance’s social media activities before they were granted the license, with them going ahead to advertise crypto without being licensed, including a Telegram channel by the name “Binance French” and an added claim of a 2.4 million euros loss following the collapse of Terra USD, UST after Binance had advertised it as United States dollar-supported.
Binance France responded to the claims, denied any fraudulent advertisement during the alleged period, and claimed that Telegram groups are known as global community forums for users worldwide to join and engage voluntarily without any intentions of false advertising involved.
The crypto exchange also noted the complaints on their involvement with Terra USD, with claims that they had only communicated staking with Binance as a safe venture and not any underlying tokens, with an ever-present warning of the possibility of market risks for crypto-related products. After the lawsuit, Binance is set to strengthen its warning messages.
The lawsuit against Binance France came when Binance global faced suspicions of a bigger problem than it was letting on. With the company failing its last auditing and a series of questionable events, the spotlight has been put on the company as to if they are on the same lane FTX was just before its collapse, the CEO of the crypto exchange has, however, denied all claims of this.
The information that Binance provided In response to news of its fund was not enough to convince investors or users of the crypto exchange that all was enough, even with the audit, which was done to ensure that the general public was assured that the digital assets are collateralized and entirely under the control of the exchange but the audit was overlooked as Binance’s attempt to cover up any problems it could be going through.
Binance’s proof of reserves report did not confirm the purpose of an audit report, and it could not address how effective the exchange could be in financial situations.
The company that was in charge of conducting the audit also said that they could not include an opinion or an assuring conclusion which could mean that they could not vouch for the numbers they had seen in the company’s financial reports. It leaves room for doubts about what is happening within the crypto exchange if so much is being hidden from the public. The proof-of-reserves words that Binance released are only helpful if it is backed up with more information on how the crypto exchange conducts internal operations.
Binance has been in the news for less than pleasant reasons. It could be attributed to the general panic state the crypto space is currently in with the harsh crypto winter and the collapse of FTX. The cases Binance have been involved in may also not be as big as reported but could be expectedly exaggerated with how much crypto users have lost over the past months and the fear of a more significant collapse of another crypto exchange giant after FTX, which created a massive debt in the crypto market, dragging down other smaller companies that had been exposed to it or had their investments in the company.
The FTX collapse triggered stricter crypto laws and regulations from various countries to avoid more instances of such a significant loss from cryptocurrencies. Countries like India are now pushing for a total crypto ban to prevent any possible exposure to fud.