Binance’s French unit is under investigation by local authorities for the “illegal” provision of digital asset services and “acts of aggravated money laundering,” the Paris public prosecutor’s office told CoinDesk.
The investigation relates to illegally operating as a digital asset service provider before it received regulatory approval in May 2022 and “aggravated money laundering by taking part in investment operations, concealment and conversion, the latter being carried out by perpetrators of offenses having generated profits,” the public prosecution office told CoinDesk. Binance is registered as a PSAN, or digital asset service provider, with the French financial regulator, the AMF (Autorité des Marchés Financiers).
The world’s largest crypto exchange is already facing a lawsuit from the U.S. Securities and Exchange Commission alleging failure to register as a trading platform and the sale of unregistered securities. The French unit is suspected of having canvassed French customers through its local arm outside the legal framework until 2022, Le Monde reported earlier on Friday.
The Paris public prosecutor confirmed to CoinDesk that an investigation concerning Binance by the specialized interregional jurisdiction of Paris led to a referral to the SEJF, an anti-financial crime arm of the government, in February 2022. “The documentary and computer elements collected during the search will now have to be the subject of an in-depth study,” the prosecutor said.
“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.”
After publication, the company’s Chief Executive Officer Changpeng “CZ” Zhao tweeted to confirm there had been a “surprise visit” by the authorities within the last couple of weeks, but that other unnamed crypto firms had been subject to similar treatment. France continued to be the company’s flagship center in Eruope, he added.
Earlier Friday Binance said it was quitting the Netherlands after failing to obtain a license showing the company meets the country’s anti-money laundering (AML) guidelines. The exchange also applied to end its registration with Cyprus’ securities regulator, saying it was focusing its efforts “on fewer regulated entities in the 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.
UPDATE (June 16, 11:12 UTC): Adds Binance’s response in the last paragraph and details throughout.
UPDATE (June 16, 11:55 UTC): Moves regulatory approval to second paragraph; moves Binance response higher; adds the company is under suspicion.
UPDATE (June 16, 13:14 UTC): Adds CZ tweet.
Edited by Sheldon Reback.
https://www.coindesk.com/policy/2023/06/16/binance-under-investigation-in-france-accused-of-aggravated-money-laundering/?utm_medium=referral&utm_source=rss&utm_campaign=headlines
