French Authorities Investigating Binance for ‘Aggravated Money Laundering’

The regulatory challenges facing crypto exchange Binance continue to mount, now from Europe.

French newspaper Le Monde today reported that Binance is under investigation by the judicial finance investigation service under the direction of the specialized interregional jurisdiction of Paris (JIRS) for “illegal” acts relating to the function of service provider on digital assets, as well as "aggravated money laundering."

Crypto media site CoinDesk reported that it had confirmed the allegations with the Paris public prosecutor's office.

The JIRS is a specialized judicial body in France that investigates cases of national significance or those that transcend regional boundaries, such as corruption, terrorism, financial crimes, drug trafficking, and other serious crimes.

Le Monde reported that Binance was suspected of having failed to carry out appropriate know-your-customer (KYC) checks, and of having illegally advertised within France before it received appropriate licenses from the country's financial regulator, Autorité des marchés financiers (AMF), to operate as a digital asset service provider in May 2022.

According to CoinDesk, the Paris public prosecutor revealed that a JIRS investigation was referred to the Service d'Enquêtes Judiciaires des Finances (SEJF), a government body with oversight of financial crime, in February 2022. A search reportedly took place last week to collect documents and digital materials, which are now the subject of an “in-depth study.”

Binance France president David Prinçay confirmed on Twitter that the exchange was visited by the authorities last week, stating that, "In France, on-site inspections by regulators and inspectors are part of the regulatory obligations that all financial institutions must comply with."

Prinçay added that Binance "has been fully collaborative and fully met obligations," and that the exchange will "continue to work closely with regulators and law enforcement agencies on all ongoing compliance requirements to maintain high standards."

Decrypt has reached out to Binance for comment.

Binance’s mounting legal woes

Binance CEO Changpeng "CZ" Zhao had previously praised France for its "pro-crypto" regulatory stance, adding that the country is "uniquely positioned to be the leader of this industry in Europe."

On June 5, CZ tweeted on June 5 that the exchange "obtained the ISO 27001 (information security) and the ISO 27701 (data privacy) certifications in France, UAE, and Bahrain.”

Binance to Leave Netherlands After Failing to Acquire VASP License

Binance is set to exit the Netherlands after its attempts to secure a virtual asset service provider (VASP) license failed. Starting from today, the crypto exchange is no longer registering new users residing in the country. It is also sending emails to existing users with information regarding their accounts and any assets they currently have on the platform, Binance said in an announcement Friday. The company added that starting July 17, trading in the Netherlands will be halted and existing u...

Elsewhere in Europe, Binance called it quits in the Netherlands today after failing to register as a VASP despite exploring "many alternative avenues to service Dutch residents in compliance with Dutch regulations," the exchange said in a press release.

Last week, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its CEO for offering unregistered securities, failing to restrict U.S. investors from accessing Binance.com, and operating as an unregistered exchange, broker, and clearing agency.