Binance Under Judicial Investigation in France: Allegations of Money Laundering, Tax Fraud, and More

Binance Under Judicial Investigation in France

French authorities have launched a judicial investigation into Binance, the world’s largest cryptocurrency exchange, over allegations of money laundering, tax fraud, and drug trafficking.

In May 2022, Binance secured regulatory approval in France, becoming a registered Digital Asset Service Provider (DASP) under the supervision of the Autorité des Marchés Financiers (AMF). However, despite its registration, the company is now facing accusations of violating its obligations under DASP regulations.

Regulatory Challenges Mount for Binance

The French investigation could lead to criminal charges, adding to the growing list of legal troubles for Binance. The accusations echo similar claims brought against the exchange and its former CEO, Changpeng Zhao (CZ), by the U.S. Department of Justice in 2023. That case ended with Binance paying a record $4 billion fine and CZ stepping down as CEO.

The ongoing French investigation focuses on alleged offenses committed between 2019 and 2024. According to French journalist Grégory Raymond, the inquiry began after users filed complaints about financial losses and misleading information. It revealed that Binance operated in France and the EU without proper registration or licensing from the AMF during that period. Additionally, the company allegedly ran promotional campaigns through influencers prior to obtaining its legal registration, a direct violation of French laws.

Questionable Transfers and Further Allegations

Adding to the scrutiny, Binance reportedly transferred $20 million worth of Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) to Wintermute earlier today. Critics argue that Wintermute engages in market manipulation by creating artificial liquidity to exploit retail investors.

The exchange has also faced backlash for its practice of listing low market-cap meme coins, which some claim unfairly target inexperienced investors.

Global Legal Pressure

In the U.S., the Supreme Court recently allowed a class-action lawsuit against Binance to proceed. The lawsuit alleges the exchange illegally sold unregistered securities to investors.

Meanwhile, in the UK, Binance faces a separate legal challenge. Former senior employee Amrita Srivastava has filed a lawsuit claiming wrongful dismissal. She alleges that her employment was terminated after she reported a colleague who solicited a bribe from a customer in exchange for preferential treatment.

Intensifying Regulatory Oversight

The investigation into Binance is part of a broader crackdown on centralized cryptocurrency exchanges. Just yesterday, KuCoin admitted to operating as an unlicensed money-transmitting business in the U.S., with founders Chun Gan and Ke Tang agreeing to pay nearly $300 million in fines to avoid imprisonment.

As of now, French authorities have not disclosed additional details about the Binance investigation, but the outlook remains grim for the beleaguered crypto giant.

Conclusion

Binance’s mounting legal challenges underscore a growing trend of intensified regulatory scrutiny across the cryptocurrency industry. For the largest exchange in the world, navigating these investigations will be a critical test of its resilience and commitment to compliance.