Binance Under Investigation in France, Accused of ‘Aggravated’ Money Laundering
Binance’s French unit is under investigation by local authorities for the “illegal” provision of digital asset services and “acts of aggravated money laundering,” the Paris public prosecutor’s office has confirmed to CoinDesk.
Allegations against Binance from French prosecutors “relates on the one hand to acts of illegal exercise” of operating as a digital asset service provider and “acts of aggravated money laundering, by competition with operations of investments, concealment, conversion, the latter being carried out by perpetrators of offenses having generated profits,” the Paris’ public prosecution office told CoinDesk. Binance is registered as a PSAN or digital asset service provider, with the French financial regulator.
Binance, which is facing a lawsuit from the U.S. Securities and Exchange Commission alleging failure to register as a trading platform and the sale of unregistered securities, is suspected of having canvassed French customers through its local arm outside the legal framework until 2022, news publication Le Monde reported earlier on Friday.
The Paris public prosecutor confirmed to CoinDesk that an investigation concerning Binance carried out by the specialized interregional jurisdiction of Paris (JIRS) led to a referral to the SEJF, an anti-financial crime arm of the government, in February 2022.
“The documentary and computer elements collected during the search will now have to be the subject of an in-depth study,” the Paris public prosecutor said.
The news comes as Binance announced it was quitting the Netherlands after failing to obtain a license showing the company meets the country’s anti-money laundering (AML) guidelines. The exchange also applied to end its registration with Cyprus’ securities regulator, saying it was focusing its efforts “on fewer regulated entities in the EU.”
In May 2022, Binance secured regulatory approval in France’s from markets regulator AMF (Autorité des marchés financiers). During last year’s Paris Blockchain Week, the company’s Changpeng “CZ” Zhao said the city is “probably … the financial hub for crypto in Europe and the larger part of the world.” The company had also previously said it was injecting $116 million through a partnership with a local nonprofit to grow the French crypto ecosystem.
France, in the meantime, have been courting crypto firms to come and set up shop in the country, as the European Union sets up to regulate crypto under its recently sealed Markets in Crypto Assets (MiCA) framework.
Following the publication of this article, Binance told CoinDesk that local authorities had visited the company’s offices in France.
“In France, on-site visits by regulators and inspectors are part of regulatory obligations to which all financial institutions must adhere… Binance, as always, was fully collaborative and we met our obligations accordingly. We continue to work closely with regulators and law enforcement agencies on all ongoing compliance requirements to uphold high standards,” a spokesperson for Binance said in an emailed statement to CoinDesk.
“Binance invests considerable time and resources into cooperating with law enforcement globally. We abide by all laws in France, just as we do in every other market we operate. We will not comment on the specifics of law enforcement or regulatory investigations except to say that information about our users is held securely and only provided to government officials upon receipt of documented appropriate justification,” the spokesperson added.
UPDATE (June 16, 11:12 UTC): Adds Binance’s response in the last paragraph and details throughout.
