The legal troubles for the world’s leading crypto exchange Binance continue to mount as a new report suggests the exchange is under investigation in France since early 2022.
According to a report published in the French daily, Le Monde, the France-based arm of the crypto exchange has been the subject of a preliminary investigation — conducted by the Judicial Investigation Service of Finance under the direction of the specialized interregional jurisdiction of Paris — since February 2022.
The Paris Prosecutor’s Office reportedly cited “acts of illegal exercise of the function of a service provider on digital assets (PSAN), and acts of aggravated money laundering, by participating in investment operations, concealment, conversion, the latter being carried out by perpetrators of offenses having generated profits,” as the basis of the investigation.
Binance reportedly failed to follow or comply with Know Your Customer procedures that keep a check on users and potential money laundering activities.
The crypto exchange reportedly failed to obtain an operating license and illegally offered its services to French customers. Since 2019, crypto exchanges have been required to obtain the approval of the Financial Markets Authority (AMF) to operate. However, Binance, which has been operating in France since 2020, reportedly only received AMF approval in May 2022.
A Binance spokesperson told Cointelegraph:
“Binance invests considerable time and resources into cooperating with law enforcement globally. We abide by all laws in France, just as we do in every other market we operate. We will not comment on the specifics of law enforcement or regulatory investigations except to say that information about our users is held securely and only provided to government officials upon receipt of documented appropriate justification.“
The reports of the investigation in France emerged within weeks of a lawsuit against the crypto exchange in the United States. The U.S. Securities and Exchange Commission has filed 13 charges against the crypto exchange’s U.S. subsidiary, Binance.US, and CEO Changpeng Zhao.