The legal troubles for world’s leading crypto exchange Binance continue to mount as new reports suggest the exchange has been reportedly under investigation in France since early last year.
According to a report published in French daily Le Monde, the French 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 public prosecutor’s office reportedly cited “acts of illegal exercise of the function of 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 the “know your customer” procedures that keeps a check on users and their money laundering activities.
The crypto exchange reportedly failed to obtain an operating license and offered their services to French customers illegally. Since 2019, crypto exchanges are 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 got the 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 emerge within weeks of a securities lawsuit against the crypto exchange in the United States. The U.S. Securities and Exchange Commission has filed a total of 13 charges against the crypto exchange’s U.S. subsidiary and CEO Changpeng Zhao.