Binance’s French unit is currently under investigation by local authorities for allegedly providing “illegal” digital asset services and engaging in “acts of aggravated money laundering,” according to a statement from the Paris public prosecutor’s office. The investigation is centered around Binance’s operation as a digital asset service provider before obtaining regulatory approval in May 2022 and its alleged involvement in investment operations and money laundering activities.
The Paris public prosecutor’s office revealed that the investigation stems from Binance’s alleged illegal operation as a digital asset service provider before receiving official authorization. Furthermore, the investigation focuses on suspicions of “aggravated money laundering by taking part in investment operations, concealment, and conversion, with perpetrators of offenses having generated profits.” Binance is registered as a digital asset service provider (PSAN) with France’s financial regulator, the AMF (Autorité des Marchés Financiers).
This investigation follows a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance, which accuses the exchange of failing to register as a trading platform and facilitating the sale of unregistered securities. The French unit of Binance is suspected of soliciting French customers through its local operations outside the legal framework until 2022, as reported by Le Monde.
Confirming the investigation, the Paris public prosecutor’s office stated that the specialized interregional jurisdiction of Paris initiated the case in February 2022, leading to a referral to the SEJF, a government anti-financial crime arm. The prosecutor emphasized the need for a thorough examination of the documentary and computer evidence collected during the search.
In response to the investigation, a Binance spokesperson stated, “We continue to work closely with regulators and law enforcement agencies on all ongoing compliance requirements to uphold high standards.” The spokesperson added, “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.”
CoinDesk reached out to Binance for further comments on the ongoing investigation but received no additional information. The spokesperson emphasized that user information is held securely and only disclosed to government officials upon receipt of appropriate justification.
Prior to this investigation, Binance announced its departure from the Netherlands after failing to obtain a license that demonstrates compliance with the country’s anti-money laundering guidelines. Additionally, the exchange has applied to terminate its registration with Cyprus’ securities regulator, citing a focus on fewer regulated entities within the European Union.
Binance CEO Changpeng “CZ” Zhao previously highlighted Paris as a prominent financial hub for cryptocurrencies in Europe and the world during last year’s Paris Blockchain Week. The company had also pledged a $116 million investment in partnership with a local nonprofit to support the growth of the French crypto ecosystem.
France, on its part, has been actively attracting crypto firms as the European Union establishes regulations for the crypto industry under the recently ratified Markets in Crypto Assets (MiCA) framework.
As the investigation into Binance’s French unit unfolds, it remains to be seen how this will impact the company’s operations and its standing within the crypto community.
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