In a recent development, Binance, the world’s largest cryptocurrency exchange, has come under investigation in France for allegedly providing illegal digital asset services and engaging in money laundering. The Paris prosecutor’s office confirmed the ongoing investigation, stating that the cryptocurrency exchange’s French unit is suspected of operating as a digital asset service provider without proper regulatory approval and participating in acts of aggravated money laundering.
This news adds to the existing legal challenges faced by the company, including an ongoing lawsuit filed by the U.S. Securities and Exchange Commission (SEC) regarding unregistered securities and failure to register as a trading platform.
According to the Paris public prosecutor, the investigation against CZ’s company began in February 2022 and was referred to the anti-financial crime arm of the government. The probe focuses on Binance‘s activities before it received regulatory approval in May 2022 and its alleged involvement in investment operations, concealment, and conversion of funds associated with criminal activities. The French authorities have collected documentary and computer evidence, which will undergo further scrutiny as part of the investigation.
A spokesperson for the exchange emphasized the company’s commitment to working closely with regulators and law enforcement agencies to meet compliance requirements. The spokesperson stated that the platform adheres to all laws in France, as it does in other markets, and invests significant time and resources in cooperating with law enforcement globally. They highlighted the secure handling of user information, which is only shared with government officials upon receiving proper justification.
Changpeng “CZ” Zhao, CEO of the company, confirmed that the authorities had conducted a surprise on-site visit to Binance France a couple of weeks ago. CZ noted that such visits are a routine part of regulatory obligations for financial institutions in France. He further stated that the platform in France fully cooperated with the authorities and clarified that other well-known crypto businesses in Paris had also undergone similar inspections. CZ affirmed Binance’s commitment to maintaining its presence in France, considering it as its flagship center in Europe.
Implications and Regulatory Landscape
The investigation against Binance in France highlights the increasing scrutiny faced by cryptocurrency exchanges worldwide. Governments and regulatory bodies are seeking to establish stricter regulations to combat money laundering, ensure investor protection, and maintain the integrity of financial markets. The European Union’s recently sealed Markets in Crypto Assets (MiCA) framework aims to regulate cryptocurrencies across member states. Meanwhile, France has been actively encouraging crypto firms to operate within its jurisdiction.
Binance’s French unit is now under investigation in France for allegedly providing illegal digital asset services and engaging in acts of aggravated money laundering. As the investigation unfolds, Binance maintains its commitment to regulatory compliance and cooperation with law enforcement agencies. The outcome of this investigation will have implications for Binance’s operations in France and may impact the wider cryptocurrency industry’s regulatory landscape.