Binance, the world's largest cryptocurrency exchange, is now facing a legal investigation in France, adding to its growing list of legal challenges. French prosecutors have announced the initiation of a probe led by the Paris prosecutor's office, focusing on allegations of illegal trading in digital assets by Binance's French arm. Additionally, the exchange is also being investigated for "aggravated money laundering." Le Monde newspaper, which first reported on the investigation, has suggested that Binance may have failed to fulfill its obligations in preventing money laundering on its platform.
This latest development follows a recent announcement by the US Securities and Exchange Commission (SEC) that it has charged Binance with securities law violations. The SEC has accused the cryptocurrency giant of engaging in "an extensive web of deception" and deliberately evading the law. In response, Binance has decided to halt US dollar deposits and has urged its clients to withdraw their funds by the upcoming week.
In relation to the French allegations, Binance has acknowledged that it underwent an "on-site visit" by the relevant authorities. The company took to Twitter, stating that it dedicates substantial time and resources to cooperating with law enforcement agencies worldwide. It insists on complying with all laws in France, as it does in every other market where it operates.
Binance, founded in Shanghai in 2017, has established a dominant position in the cryptocurrency trading market, transforming its founder, Changpeng Zhao, into a billionaire. However, it has frequently faced accusations of facilitating money laundering, employing intricate structures to circumvent regulations, and violating sanctions—allegations that Binance strongly denies.
The ongoing investigation in France concerns Binance's French unit and its alleged illegal provision of digital asset services. The Paris public prosecutor's office has highlighted the suspicion that the company operated as a digital asset service provider without regulatory approval prior to May 2022. Moreover, the investigation also involves allegations of "aggravated money laundering," relating to involvement in investment operations, concealment, and conversion of illicitly obtained profits.
Binance is registered with the French financial regulator, the Autorité des Marchés Financiers (AMF), as a digital asset service provider, known as a PSAN. However, the French unit is suspected of targeting French customers through its local arm, operating outside the legal framework until 2022.
Confirming the investigation, the Paris public prosecutor has disclosed that the specialized interregional jurisdiction of Paris referred the case to the government's anti-financial crime unit, SEJF, in February 2022. The prosecutor stated that the collected documentary and computer evidence will now undergo thorough examination.
In response to the developments, a spokesperson for Binance has emphasized the company's commitment to working closely with regulators and law enforcement agencies to uphold high standards. They have reiterated Binance's adherence to French laws and regulations, emphasizing that user information is securely held and only disclosed to government officials with proper justification.
Following the publication of the news, Binance CEO Changpeng "CZ" Zhao took to Twitter to acknowledge a "surprise visit" by authorities within the past few weeks. He also noted that other undisclosed cryptocurrency firms had experienced similar treatment. Zhao further highlighted that France remains a crucial center for Binance's operations in Europe.
