French Authorities Investigate Binance Alleging Money Laundering
The France authority is tasked with investigating crime within the judiciary on claims that Binance orchestrated money laundering offences. The announcement by the French authorities piles to the regulatory challenges Binance is facing in the US following the move by SEC to initiate a lawsuit in early June.
Aggravated Money Laundering Prompts Binance Investigation in France
The news of Binance facing investigations from the judicial branch on financial crime, as reported by French media house Le Monde indicated the finance investigation of Binance is ongoing as instructed by the Interregional Jurisdiction of Paris (JIRS). The investigator alleges Binance perpetrated illegal acts as digital assets service provider involving aggravated money laundering. The public prosecutor’s office in Paris acknowledged receipt of the allegations.
The JIRS involves a specialized judicial entity investigating cases transcending regional boundaries. Also, it probes cases with national significance, including drug trafficking, terrorism, and corruption-related crimes.
Le Monde details that Binance was accused of failure to execute the requisite know-your-customer (KYC) assessments. Also, the regulator is accusing Binance of illegally advertising its services even before it secured the appropriate licenses from the Autorité des marchés financiers (AMF). The financial regulator approved Binance’s digital assets service provider license in May last year.
The Paris-based public prosecutor outlined that the JIRS investigation of Binance would become the responsibility of Service d’Enquêtes Judiciaires des Finances (SEJF). SEJF involves the government-constituted entity tasked in February last year to investigate financial crime. It prompted the search conducted last week to collect digital materials and documents subjected to in-depth scrutiny.
The head of Binance France, David Prinçay, affirmed the investigation in a tweet. He acknowledged the visit to the Binance office last week. He portrayed that on-site inspections that feature inspectors and regulators constitute a critical part of regulatory obligations for financial institutions.
Investigation in France Erodes ISO Certifications of Binance
Prinçay restated that Binance France is compliant with the legislation. He restated the firm’s commitment to collaborate with law enforcement agencies and regulators. Compliance with the changes in requirements enables Binance to guarantee high standards.
The investigation of Binance France is a surprise development at a time when chief executive Changpeng Zhao recently lauded France for the pro-crypto regulatory space. He added that France leverages its unique positioning to become the leader in the digital assets industry across Europe.
In his June 5 tweet, Zhao celebrated the ISO certification on information security (ISO 27001). Also, it outlined that Binance had secured ISO certification on data privacy (ISO 27701) in France, similar to the achievement in UAE and Bahrain.
Exiting Netherlands for Noncompliance with AML
Meanwhile, Binance investigation in France coincides with Binance announcing its exit from the Netherlands, citing an inability to secure the virtual asset service provider (VASP) license from the Dutch regulator. Binance suspended registering new Dutch users and gave a month-long window for trade and deposits for existing users. The lapse of the window by July 17 would compel all Dutch users to empty their accounts.
The firm confirmed in its Friday, June 16 press release that it failed to convince the Dutch regulator of its compliance with the anti-money laundering rules. It is exiting the market since alternative avenues explored to offer service to the residents proved futile.
Binance Exiting Cyprus to Purse Larger EU Markets
Another statement conveyed by Binance confirmed it was exiting Cyprus following the application to deregister as a virtual asset service provider. Although Binance never indicates the date of application, it marks a sudden twist for the crypto operator only licensed to operate in Cyprus in October 2022.
The struggle with the law enforcement agencies seems unending, with the US Securities and Exchange Commission (SEC) initiating a suit against Binance and the chief executive. The security watchdog chaired by Garry Gensler alleges that it offered unregistered securities and operated without seeking approval to run clearance, brokerage and exchange services. Similarly, SEC alleges Binance, under the stewardship of Changpeng Zhao, commingled clients’ funds in violation of securities laws.
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