French Authorities Are Investigating Binance’s Local Arm: Report
French prosecutors are probing Binance’s local affiliate over potential money laundering and client canvassing allegations, Le Monde reported on Friday. In the meantime, the crypto exchange said it would exit the Dutch market after failing to meet registration requirements.
Binance May Have Illegally Exercised its Function as a Regulated Virtual Asset Service Provider, Report Says
French affiliate of the leading global crypto exchange Binance is reportedly under investigation by the Paris prosecutors over allegations of potential illegal canvassing of clients and “aggravated money laundering,” according to the local news outlet Le Monde. The public prosecutor’s office in Paris confirmed the report, Le Monde said.
In particular, the crypto exchange is being investigated over “illegal exercise of the function of service provider on digital assets (PSAN), and on the other hand facts of aggravated laundering, by competition with investment operations, concealment, conversion, the latter being carried out by perpetrators of offences who have generated profits,” the report stated.
Binance is allegedly suspected of having canvassed users in France through its local affiliate in a manner that was outside the legal boundaries until 2022, Le Monde added. Binance’s French arm is a regulated digital asset service provider in the country.
In response to the reports, Binance confirmed it had an on-site visit by French prosecutors last week, a part of the country’s regulatory obligations “to which all financial institutions must adhere,” the company’s spokesperson added. The crypto exchange did not reveal any details relating to the investigation.
Shortly after the reports broke, Binance founder and CEO Changpeng Zhao replied to a post from one Twitter user who alleged the probe into the exchange represents “an orchestrated attack against crypto.”
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Binance to Exit Cyprus and Netherlands Markets
Binance is coming under scrutiny in France following a series of major developments regarding the world’s biggest crypto exchange. Notably, on Wednesday, the company’s Cyprus arm applied to be removed as a registered digital asset provider in the country in a bid to place more focus on its European operations.
Similarly, the trading platform said it was planning to exit the Netherlands market on Friday after failing to meet registration requirements to operate as a licensed virtual asset service firm. As a result, as of July 17, Binance will stop providing trading services in the Netherlands, and current Dutch customers will only be able to withdraw their funds. Last month, Binance said it would leave the Canadian market due to recent regulatory changes.
The moves come less than two weeks after Binance and its founder Changpeng Zhao were sued by the US Securities and Exchange Commission (SEC) for several wrongdoings, including commingling of user assets, listing unregistered securities, and unsuccessfully preventing Binance.US customers from trading on the company’s global platform.
Do you think Binance could be in serious trouble considering intensifying recent scrutiny by global regulators? Let us know in the comments below.