Binance Faces Expanded Investigation in France
French authorities have broadened their investigation into Binance, the prominent cryptocurrency exchange, now focusing on serious allegations of money laundering, tax fraud, and other potential crimes spanning from 2019 through 2024. This development was reported by Reuters on Tuesday.
In response to these serious allegations, Binance has firmly denied any wrongdoing. The company stated in an emailed response to CoinDesk that it will “vigorously fight any charges made against it.” This robust defense underscores the exchange’s commitment to maintaining its reputation amid increasing scrutiny.
The investigation was initiated by JUNALCO, a specialized division of the Paris public prosecutor’s office that deals with economic and financial crimes. The inquiry involves alleged offenses occurring not only in France but also across the broader European Union (EU). Initially, French authorities launched an investigation into Binance in June 2023 for accusations of “aggravated money laundering” and the “illegal provision of cryptocurrency trading services,” particularly before Binance secured regulatory approval from the AMF, France’s financial regulator, in 2022.
In a statement, Binance expressed its disappointment regarding JUNALCO’s decision to escalate the matter to the French judiciary for further investigation, highlighting that the issues under review are several years old. At the time the initial investigation was announced in 2023, Binance’s then-CEO, Changpeng “CZ” Zhao, characterized the reports as “FUD” (fear, uncertainty, doubt) on social media, and reaffirmed Binance’s dedication to its operations in France, which he referred to as the exchange’s “flagship center in Europe.”
Adding to the exchange’s challenges, last April, Zhao was sentenced to four months in prison in the U.S. for failing to implement a sufficient know-your-customer (KYC) and anti-money laundering (AML) framework at Binance, thereby violating the Bank Secrecy Act (BSA). In addition to this ruling, Binance admitted to breaching the BSA and sanctions laws, agreeing to pay a substantial sum of $4.3 billion in fines and penalties to resolve these charges.
As part of Zhao’s plea agreement with U.S. prosecutors, he consented to step down as CEO of Binance. Following his departure, the exchange appointed Richard Teng, a former regulator, as the new CEO. Since Teng assumed leadership, Binance has reportedly intensified its compliance efforts, significantly increasing its workforce and escalating its annual compliance spending by nearly 40%.
