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Binance's French division is currently being investigated by local authorities for allegedly engaging in "illegal" activities related to digital asset services and "acts of aggravated money laundering," as confirmed by the Paris public prosecutor's office to CoinDesk.
The ongoing investigation pertains to allegations of Binance operating as a digital asset service provider without obtaining regulatory approval prior to May 2022. The Paris public prosecution office informed CoinDesk that the investigation also involves "aggravated money laundering by taking part in investment operations, concealment and conversion, the latter being carried out by perpetrators of offenses having generated profits,” Binance is registered with the French financial regulator, the AMF (Autorité des Marchés Financiers), as a PSAN (digital asset service provider).
In addition to the ongoing lawsuit filed by the U.S. Securities and Exchange Commission, which accuses the world's largest cryptocurrency exchange of not registering as a trading platform and conducting the sale of unregistered securities, the French division of the exchange is now under suspicion. According to Le Monde's report earlier on Friday, it is believed that the French unit had been soliciting French customers through its local entity without adhering to the legal framework until 2022.
The Paris public prosecutor has officially verified to CoinDesk that an inquiry regarding Binance conducted by the specialized interregional jurisdiction of Paris resulted in a transfer to the SEJF, a government anti-financial crime unit, in February 2022. The prosecutor stated, "The documentary and computer elements collected during the search will now have to be the subject of an in-depth study,"
"We continue to work closely with regulators and law enforcement agencies on all ongoing compliance requirements to uphold high standards," a Binance spokesperson said in an emailed statement. "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."
Following the release of the publication, Changpeng "CZ" Zhao, the Chief Executive Officer of the company, took to Twitter to affirm that there had been an unexpected visit from the authorities in the past few weeks. He also mentioned that other undisclosed cryptocurrency firms had experienced similar encounters. Additionally, CZ emphasized that France remained the company's primary hub in Europe.
On Friday, Binance announced its decision to withdraw from the Netherlands due to its inability to acquire a license that would demonstrate compliance with the country's anti-money laundering (AML) regulations. Additionally, the exchange submitted a request to terminate its registration with Cyprus' securities regulator, stating that it intends to concentrate its efforts on a smaller number of regulated entities within the European Union (EU).
During last year's Paris Blockchain Week, Binance CEO 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 fund growth of the French crypto ecosystem.
As the European Union establishes regulations for cryptocurrencies through its newly implemented Markets in Crypto Assets (MiCA) framework, France has actively sought to attract crypto companies.
Source Coindesk
