Binance France under Probe over ‘Illegal’ Crypto Service, Money Laundering: Report

Binance’s local unit in France is being investigated by public prosecutors in Paris over the ‘illegal’ provision of crypto services before it was licensed in May last year, CoinDesk reported. The exchange is also being probed for ‘acts of aggravated money laundering', the outlet said, citing the French city’s public prosecutor’s office.

The local French daily newspaper, Le Monde, reported receiving the same information from the prosecutor’s office. The outlet said Binance is suspected of having offered digital asset services in the country since 2020. In addition, the exchange is being scrutinized over the likelihood that it engaged in the crypto promotion before it was registered.

The French anti-financial crime agency, the Financial Judicial Investigation Service, started investigating Binance in February 2022, having been directed by a specialized court, JIRS Paris, the publication reported.

Binance Says Inspection ‘The Norm’

The revelation about Binance France comes at a time the world’s largest cryptocurrency exchangeis battling a lawsuit from the US Securities and Exchange Commission (SEC) which alleged that the exchange offered unregistered securities on its illegal trading platform. The US derivatives industry watchdog, the Commodity Futures Trading Commission, made similar allegations earlier in March.

However, reacting to the development, Changpeng Zhao, Binance’s CEO, in a tweet posted on Friday had dismissed the report as “not news,” saying the exchange recevied a “surprise visit” from the local authorities “a couple of weeks ago.” This type of “on-site inspections of regulated businesses are the norm for banks, and now for crypto too,” Zhao wrote. The CEO added that other unnamed ‘well known’ crypto firms in Paris were also inspected. He pledged that Binance France remains the company’s ‘flagship centre in Europe’.

4. FUD.In France, surprise (no advanced notice) on-site inspections of regulated businesses are the norm, for banks, and now for crypto too.The surprise visit for Binance France happened a couple of weeks ago. It's not "news". Binance France cooperated fully. Binance also… https://t.co/xdbLc5jXBW

In a separate tweet, Binance said that it “had an on-site visit last week by the relevant authorities,” but “will not comment on the specifics of law enforcement or regulatory investigations.”

“Binance, as always, was fully collaborative and we met our obligations accordingly,” the exchange stated. “We continue to work closely with regulators and law enforcement agencies on all ongoing compliance requirements to uphold high standards.”

To clarify:In France, on-site visits by regulators and inspectors, are part of regulatory obligations to which all financial institutions must adhere. We had an on-site visit last week by the relevant authorities. Binance, as always, was fully collaborative and we met our…

Binance Faces Setback in Europe

Meanwhile, Binance, which recently obtained its seventh license in the European Union area, suffered a blow in its expansion efforts on the continent. On Friday, the exchange announced its exit from the Netherlands after failing to secure a virtual asset service provider license. Furthermore, the exchange has applied to cancel its Cypriot license, saying it wants to focus its efforts on its “fewer regulated entities in the EU.”