French clients file complaint against Binance over social media marketing practices

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By Tassilo Hummel

PARIS, Dec 20 (Reuters) – A group of French crypto investors have filed a criminal complaint against Binance, accusing the world’s biggest crypto exchange of misleading the public and promoting its services before it was legally allowed to do so, their lawyers said on Tuesday. 

The group, who were clients of the platform, have brought their complaint with the Paris prosecution office on charges including “misleading commercial practice”, lawyers Etienne de Dreuille and Baptiste Bonhomme told Reuters in a phone call. 

The prosecution office had no immediate comment while Binance did not reply to Reuters when contacted by email and telephone.

Binance is battling to shore up confidence after a surge in customer withdrawals following a major industry downturn. 

A Reuters analysis of Binance’s corporate filings shows that the core of the business – the giant exchange that has processed trades worth over $22 trillion this year – remains mostly hidden from public view.

The complaint does not automatically mean French prosecutors will open a formal investigation following the complaint.

Binance has previous said it wanted to open a regional hub in France for the European market, and Binance boss Changpeng Zhao has often praised France for its “pro-crypto” policies. 

The complaint, seen by Reuters, says Binance carried out marketing campaigns on social media platforms such as Instagram and Telegram when its official registration as a digital financial service was still pending with French authorities. 

Binance completed its registration France’s AMF market watchdog in May this year.

A French law which came into effect on December 2020 bans unregistered digital financial services providers from promoting their activities in France, the complaint said. 

The lawyers did not give the names of the Binance clients behind the complaint, citing privacy rules.

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 marketed itself globally, enlisting hundreds of so-called “Binance Angels” as volunteers across the world countries to promote the exchange to local crypto traders on social media.

(Reporting by Tassilo Hummel, additional reporting by Tom Wilson in London, Editing by Louise Heavens)

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