French Authorities Deepen Investigation into Crypto Exchange’s Operations
Expanded Probe into Money Laundering and Unlicensed Activities
French authorities have intensified their investigation into Binance, the world’s largest cryptocurrency exchange, over allegations of violating European money laundering and terrorist financing laws. The Paris Public Prosecutor’s Office has announced the opening of a judicial inquiry, suspecting Binance of facilitating habitual money laundering, including through drug trafficking and tax fraud across EU countries. This extends a 2023 probe into Binance for unapproved service marketing and other issues.
Allegations of Unauthorized Operations
Prosecutors allege that Binance’s marketing practices reached French users before obtaining official licensing in May 2022, raising concerns about compliance failures and insufficient anti-money laundering controls. The investigation covers activities from 2019 to 2024 and is now handled by consumer protection and anti-fraud agencies.
Challenges Across Europe
Binance’s regulatory challenges are not confined to France. The exchange has faced license withdrawals in the Netherlands, Belgium, the UK, and Germany. Executives opted to withdraw specific license applications after encountering stringent anti-money laundering requirements. In Belgium, the Financial Services and Markets Authority ordered Binance to cease all crypto-related services after the exchange failed to provide sufficient information on its non-EEA companies.
Strategic Shifts and Leadership Changes
In response to mounting regulatory pressures, Binance has made significant leadership changes. Following a $4.3 billion fine in the U.S. in 2023, co-founder Changpeng Zhao resigned, and Richard Teng assumed leadership, vowing to improve compliance. Despite these efforts, the company continues to face a litany of accusations in France, including breaches of promotional laws.
Implications for European Expansion
The ongoing investigations in France could complicate Binance’s plans under the Markets in Crypto-Assets (MiCA) framework. A criminal conviction affecting ownership structures might jeopardize approvals granted by French regulators, posing challenges for European expansion. Despite these hurdles, Binance maintains its services in France, having received registered status in 2022, unlike in the UK, where it faced marketing restrictions.