The exchange platform Binance is well and truly in turmoil, and is currently targeted by several complaints. This time, it is French investors who are taking legal action against the exchange, according to our colleagues at Mediapart. And the latter brings to light other elements. The AMF, Cedric O, and even Emmanuel Macron may have been complacent with the platform. What do you think?
15 investors file suit against Binance
The case reported by our colleagues shows that Binance is no longer in the odor of sanctity in France. According to a document filed on December 14 and consulted by Médiapart, 15 investors have filed a complaint against the exchange platform. The charges are heavy: “violation of the monopoly of digital asset service providers”, “misleading commercial practice” and “concealment of fraud”.
The accusation is based on one salient fact: Binance’s registration with the AMF in order to obtain the status of PSAN. It is recalled that although Binance filed an application in December 2020, it only obtained the sesame last May. However, crypto companies are not allowed to promote their services if they do not have the approval.
A point underlined by the investors who filed a complaint. They claim, with numerous screenshots to back it up, that Binance continued to promote its services in France, even though it was not authorised to do so:
Binance, which only obtained a PSAN registration for its French entity “Binance France” on 4 May 2022, therefore deliberately violated the PSAN monopoly from 19 December 2020 to 4 May 2022 by continuing to promote its activities to the French public.
Binance advertised in France
This is what will be debated. Are Binance’s publications in French, its Telegram group “Binance French”, and its other interventions de facto advertising to a French audience? No, according to Binance CEO Changpeng Zhao, who reacted to the accusations:
Binance did not promote in France before being allowed to do so. Telegram groups are global community forums, which any Telegram user can voluntarily create or join. “
This recognises a certain vagueness in which the world’s largest exchange platform sometimes operates, and which is due, among other things, to the still innovative aspect of cryptocurrencies in legal terms. But not only, if we believe the information gathered by Mediapart.
The French government, including Emmanuel Macron, has been complacent
This vagueness would indeed have been encouraged by the French government. Indeed, we remember Changpeng Zhao’s invitation to the Ministry of Finance a little over a year ago. The CEO of Binance had discussed with Cedric O, the Secretary of State for Digital, known for his openness to the cryptocurrency sector. Mediapart also highlights “complacent” comments by the latter, who would have implicitly encouraged Binance not to follow the rules:
Look at what the history of innovation is. In the beginning, innovation disrupts legacy regulation. And this is normal. You can’t innovate if you follow all the rules. So it’s always in the grey, or even black, area. It then picks up speed, but if you want to scale, to some degree, you have to regulate. “
Mediapart also points the finger at the role of the Autorité des Marchés Financiers (AMF), which is also said to have opened its arms to Binance – too quickly? The AMF’s deputy director of legal affairs, Stéphanie Cabossioras, participated in an online conference on the regulation of security tokens in 2020, with the advice of Binance. Then she herself joined the ranks of the exchange platform by getting hired in early 2022. This raises questions about her role in Binance’s PSAN approval, even though she was not herself in charge of reviewing the application.
“Connivance” between Emmanuel Macron and Changpeng Zhao
And this support would go all the way back to Emmanuel Macron. In November 2021, a particularly confident Changpeng Zhao told the Financial Times that the French president had confirmed that his company would be registered. Of course, it is the role of the AMF, not the head of state, to decide this.
If we refer to the article, we note however that the wording used by Changpeng Zhao is vague. We will not go as far as Mediapart in the interpretation, but we can only underline the apparent openness of Emmanuel Macron to Binance – if we believe CZ’s words. CZ said:
“[Emmanuel Macron] has really clarified that France wants to attract innovation, […] and he sees blockchain and Web3 as an important sector that he wants to attract, so he wants to attract us. […] He said “Look, we want to welcome you here, please apply for a license. “
We also recall Binance’s communications about France becoming a regional hub for the company in Europe. As well as a photo shared between Changpeng Zhao and Emmanuel Macron.
Honored to have dinner with (a few hundred people and) President Macron. @ Choose France pic.twitter.com/qQXWlTKBe5
– CZ Binance (@cz_binance) July 11, 2022
What then is to be learned from all this? If there is collusion, it could raise questions about a government that on the one hand wishes to promote stricter regulation of crypto-assets – in France as well as in Europe – while perhaps favouring the most hegemonic player in the sector.
