French authorities announce probe into Binance
The French arm of Binance has been under a preliminary investigation since February 2022 over alleged illegal provision of cryptoasset services and failure to comply with anti-money-laundering obligations, Le Monde reported, citing the Paris prosecutor’s office.
The authorities say the charges against the platform relate to its activity as an unregistered digital-asset service provider. The prosecutor’s office also noted several “acts of money laundering with aggravating circumstances.”
The press says the case was initially overseen by the Paris Special Interregional Jurisdiction, but in February 2022 it was transferred to the Financial Crimes Investigation Service. In May Binance obtained a license as a crypto-services provider from the French Financial Markets Authority.
“Documentary and digital materials collected during the search are now to be the subject of in-depth review,” the prosecutor said.
The head of Binance’s French unit, David Princay, said that on-site inspections by regulators are “part of the regulatory obligations that all financial institutions must comply with” in the country. He said the company is fully compliant with local law and is cooperating with authorities.
En France, les inspections sur site des régulateurs et des inspecteurs font partie des obligations réglementaires auxquelles toutes les institutions financières doivent se conformer. Nous avons eu une visite sur site la semaine dernière par les autorités compétentes. Binance,…
— David Princay (@davidprincay) June 16, 2023
“We will not comment on the details of law-enforcement or regulatory investigations, except to say that information about our users is securely stored and provided to government officials only after obtaining the appropriate documentary justification,” he said.
Binance Chief Changpeng Zhao commented on the news in a tweet marked with the number “4”. In his view, that means “to ignore FUD and fake news”. He said that in France, inspections of regulated entities without prior notice “are standard for banks, and now for cryptocurrencies.”
“An unexpected visit to Binance France occurred a couple of weeks ago. This is not ‘news’,” Zhao wrote.
He added that the French unit remains “our flagship hub in Europe.”
5 June SEC filed a lawsuit against the exchange and its CEO Changpeng Zhao. The regulator brought 13 charges, including selling unregistered securities. The agency also sought a court emergency freezing of the assets of the U.S. unit.
Subsequently there were reports that the Commission’s claims are analogous to the charges brought by the agency against the bankrupt cryptocurrency exchange FTX and its subsidiary Alameda Research.
On 16 June, Binance announced its exit from the Netherlands jurisdiction — the company failed to obtain a license from the local regulator.
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