Binance Faces Allegations of ‘Aggravated’ Money Laundering in France

Amid the company’s several troubles, Binance, one of the world’s leading cryptocurrency exchanges has now found itself in hot water in France over allegations of severe lapses in its money laundering protocols and the unauthorized provision of digital asset services to French customers.  According to CoinDesk, the Paris public prosecutor has confirmed this development, escalating the legal troubles for the crypto giant.

These allegations against Binance stem from two main charges. First, the company is accused of operating as a digital asset service provider unlawfully. Second, it faces more severe accusations of ‘aggravated money laundering.’

This includes competition with investments, concealment, and conversion, with the latter performed by offenders who have generated profits.

Binance is currently registered as a PSAN or digital asset service provider with the French financial watchdog.

Binance’s Legal Woes

Notably, these allegations pile onto the list of existing legal troubles for Binance. The company is currently still grappling with a lawsuit from the US Securities and Exchange Commission for allegedly failing to register as a trading platform and selling unregistered securities.

Related Reading: Binance Launches Subscription-Based Cloud Mining Services Amidst SEC’s Crackdown

French news publication Le Monde reported that Binance is suspected of having solicited French customers outside of the legal framework through its local arm until 2022.

Earlier in February 2022, an investigation conducted by the Specialized Interregional Jurisdiction of Paris (JIRS) resulted in the matter being referred to SEJF, the government’s anti-financial crime wing. This confirmation came from the Paris public prosecutor.

The Paris public prosecutor shared, signaling a meticulous investigation that may take some time to conclude:

The documentary and computer elements collected during the search will now have to be the subject of an in-depth study.

Binance’s Stumble In Europe

In related news, Binance recently announced its exit from the Netherlands, failing to secure a license that would demonstrate compliance with the country’s anti-money laundering guidelines. A representative from Binance, which has been conducting business in the Netherlands without regulatory approval, revealed that the firm attempted various alternative strategies to satisfy Dutch registration prerequisites.

The representative commented: 

While Binance is disappointed that this has become necessary, it will continue to engage productively and transparently with Dutch regulators.

The firm declared that from July 17 onwards, transactions in the Netherlands would cease, and current Dutch users would be limited to withdrawing assets from the platform.

Prior to this, the Netherlands’ Central Bank (DNB), responsible for registering financial service providers, previously cautioned Binance about conducting operations without the proper registration in the country.

Binance also recently publicized intentions to exit other jurisdictions, including Cyprus, Canada, and Australia. Nonetheless, the firm confirmed on Friday that it had secured registration in several other European Union nations, such as France, Italy, Spain, Poland, Sweden, and Lithuania, and would maintain operations in these countries.

Furthermore, Binance’s departure underscores the company’s struggles with regulatory compliance on a global scale, adding further complexity to its existing legal issues.

Meanwhile, amid the negative news surrounding Binance, the exchange’s native token BNB has shed over 10% in the past week. At the time of writing, BNB currently trades at $233.61 with a 24-hour trading volume above $600 million.

Featured image from Shutterstock, Chart from TradingView