French Authorities Investigate Binance Over Money Laundering and Tax Fraud

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The authorities of France have opened a criminal investigation into Binance, the largest crypto exchange in the world, citing allegations of aggravated money laundering, tax fraud, and cocaine trafficking. The investigation, conducted by the French National Jurisdiction for the Fight against Organized Crime (JUNALCO) pertains to Binance’s activities in France and the European Union between 2019 and 2024.

According to the prosecutor’s office, the case arose from complaints by several users who claimed financial losses due to misleading information provided by Binance. Other claims include the firm running its operations without the required licenses for most of the investigation period. The French Financial Markets Authority (AMF) disclosed that Binance obtained its registered digital asset service provider (DASP) in May 2022.

The authorities have also pointed to possible breaches of Know Your Customer rules, saying that such failures could have allowed money laundering transactions. More attention is paid to Binance influencing advertisements before obtaining legal registration in France, which violates French advertising regulations.

Impact of User Complaints and Broader EU Implications

The investigation covers France and all the other EU member countries, given that some offenses are believed to have been committed in more than one country. The French prosecutors have disclosed that the complaints made by site users were instrumental in initiating the investigation. It was also accused of providing misleading information about its services and allowing transactions that the regulators had not properly monitored.

The crackdown follows increasing international pressure on digital currency exchanges. After the failure of FTX and the subsequent clampdowns in 2023, global authorities have intensified probes into big exchanges, including Binance. In the EU, the supervision of the sector has been enhanced on the requirements of anti-money laundering and counter-terrorism financing measures.

Binance Responds to Allegations

Binance has denied the allegations that it operated without a license since November. The exchange expressed disappointment that scrutiny is being renewed on events that it viewed as closed. In addition, Binance reminded that it will continue to comply with regulations and strengthen compliance systems at a global level.

Additionally, Binance faces accusations like improper obtaining of licenses and illicit sale of securities in the US and Australia. Some legal cases include: In 2024, the company’s government non-compliance fee was $4.3 billion; the firm paid this amount to the US Department of Justice.