According to reports, the French branch of Binance is being looked into by the local police on suspicion of “aggravated money laundering.”
French newspaper Le Monde claims that Binance, the largest cryptocurrency exchange in the world, has been the subject of an inquiry in France since the beginning of 2022.
Under the supervision of the specialist interregional jurisdiction of Paris, the Judicial Investigation Service of Finance is conducting the investigation. It is described as a preliminary investigation into alleged criminal activities including aggravated money laundering and digital asset services.
The inquiry was started, according to the Paris Prosecutor’s Office, by the “illegal exercise of the function of a service provider on digital assets” as well as participation in investment operations, concealment, and conversion.
One of the main accusations is that Binance did not adhere to Know Your Customer (KYC) policies, which are intended to stop money laundering and keep track of user activity.
Furthermore, Binance is charged with operating in France without a valid license. As of 2019, cryptocurrency exchanges must apply for permission to operate in the nation from the Financial Markets Authority (AMF). Nevertheless, despite having been active in France since 2020, Binance purportedly only acquired AMF approval in May 2022.
Following the filing of 13 charges against CEO Changpeng Zhao and Binance.US, the U.S. Securities and Exchange Commission (SEC)’s U.S. affiliate, the French inquiry was launched not long after. These legal issues reveal the exchange is under increased regulatory scrutiny in a number of regions.