Binance, the world’s leading cryptocurrency exchange, is facing further legal troubles as it is reportedly under investigation in France since early 2022. According to a report from French daily Le Monde, the France-based arm of Binance has been the subject of a preliminary investigation conducted by the Judicial Investigation Service of Finance since February 2022.
The investigation, directed by the specialized interregional jurisdiction of Paris, is said to be focused on alleged illegal activities, including the illegal provision of digital asset services, aggravated money laundering, and participation in investment operations. The Paris Prosecutor’s Office cited these acts as the basis for the investigation.
One of the key allegations against Binance is its failure to follow or comply with Know Your Customer (KYC) procedures, which are designed to prevent money laundering and ensure user identification. Additionally, Binance is accused of offering its services to French customers without obtaining the necessary operating license. Since 2019, crypto exchanges in France have been required to obtain approval from the Financial Markets Authority (AMF) to operate. However, Binance reportedly only received AMF approval in May 2022, despite operating in the country since 2020.
In response to the allegations, a Binance spokesperson told Cointelegraph that the exchange cooperates with law enforcement globally and abides by all laws in France, as well as in other markets where it operates. The spokesperson also emphasized that user information is held securely and only provided to government officials with appropriate justification.
The investigation in France comes shortly after Binance faced a lawsuit in the United States. The U.S. Securities and Exchange Commission (SEC) filed 13 charges against Binance’s U.S. subsidiary, Binance.US, and CEO Changpeng Zhao. The legal challenges in multiple jurisdictions highlight the increasing regulatory scrutiny faced by Binance and the broader cryptocurrency industry.
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