The ongoing saga of Binance, one of the world’s leading cryptocurrency exchanges, has taken a new turn as French authorities expand their investigation into the platform’s operations. According to a Tuesday report by Reuters, the probe now encompasses allegations of money laundering, tax fraud, and other financial crimes dating from 2019 to 2024.
In response to these serious allegations, Binance has publicly maintained its innocence. A spokesperson for the exchange expressed its intention to “vigorously fight any charges made against it” in a statement shared with CoinDesk.
The investigation is being conducted by JUNALCO, the financial and economic crime division of the Paris public prosecutor’s office. Initially launched in June 2023, the inquiry focuses on allegations of “aggravated money laundering” and the “illegal” provision of cryptocurrency trading services in France, as well as within the broader European Union (EU). Notably, this investigation was initiated prior to Binance obtaining regulatory approval from the French financial regulator, AMF, in 2022.
The spokesperson for Binance conveyed deep disappointment at JUNALCO’s decision to escalate matters to the judiciary, emphasizing that the events in question span several years.
Changpeng “CZ” Zhao, the former CEO of Binance, previously described initial investigations as “FUD” (fear, uncertainty, and doubt), reaffirming Binance’s commitment to maintaining its operations in France, which he branded as the exchange’s “flagship center in Europe.”
The cloud of legal troubles hanging over Binance intensified last April when Zhao received a four-month prison sentence in the United States for failing to implement an adequate know-your-customer (KYC) and anti-money laundering (AML) regime, thus violating the Bank Secrecy Act (BSA). Additionally, Binance admitted to breaches of the BSA and sanctions laws, ultimately agreeing to pay $4.3 billion in fines and penalties to settle these charges.
As part of the plea agreement with U.S. prosecutors, Zhao stepped down as CEO, and Richard Teng, a former regulator, has since assumed leadership at Binance. Under Teng’s stewardship, the exchange has reportedly heightened its compliance efforts, increasing its workforce and raising spending on regulatory measures by nearly 40% year-over-year.
The unfolding developments in this case not only raise significant questions about Binance’s operations but could also have far-reaching implications for the future of cryptocurrency regulation in Europe and beyond. The cryptocurrency industry watches closely as this high-stakes investigation unfolds, potentially setting new precedents for compliance and regulatory standards within the rapidly evolving digital asset landscape.
