French authorities have launched a judicial investigation into Binance, the world’s largest centralized crypto exchange, which is facing charges of money laundering, tax fraud, and drug trafficking in France.
Binance gained regulatory approval in the European country in May 2022, becoming a registered Digital Asset Service Provider (DASP) under the supervision of the Autorité des Marchés Financiers (AMF).
Binance accused of violating DASP rules in France
Despite the registration, regulators now accuse the exchange of violating DASP obligations. The investigation could lead to criminal charges against the company.
The allegations in France mirror those that Binance and its former CEO Changpeng Zhao (CZ) faced in 2023 from the US Department of Justice. That case concluded with Binance paying a $4 billion fine that cost CZ his resignation.
However, similar regulatory scrutiny now looms over the exchange in France. This marks another significant regulatory challenge for Binance.
The violations cover the period from 2019 to 2024 and include activities in France and the European Union. The investigation, which was launched after user complaints about financial losses and misleading information, revealed that Binance was not registered or licensed by the AMF at the time. In addition, Binance allegedly advertised via influencers before legal registration, in violation of French laws, local reporter Grégory Raymond wrote.
Binance in the sights of regulators
The exchange continues to face mounting lawsuits and criminal allegations globally.
Adding to the vigilance, Binance transferred $20 million worth of BTC, ETH, and SOL to Wintermute earlier today. Critics argue that Wintermute engages in market manipulation by using artificial liquidity to unfairly exploit retail investors.
The exchange has faced similar allegations before for listing low-market-cap memecoins. In the US, for example, the Supreme Court recently ruled that a class-action lawsuit against Binance can proceed. Former investors allege that the company illegally sold unregistered tokens.
Alleged bribery case in the UK
In a separate case in the UK, Binance is facing legal action from a former senior employee. Amrita Srivastava claims she was unfairly terminated from the company after she reported that a colleague solicited a bribe from a client in exchange for favorable treatment. The lawsuit, filed last November, has added to the exchange’s legal woes.
Overall, regulatory action against centralized exchanges is intensifying. This week, KuCoin admitted to operating an unlicensed money transmission business in the US. Founders Chun Gan and Ke Tang agreed to pay nearly $300 million in fines, avoiding jail time.
French authorities have yet to provide further details about the Binance investigation. However, it is not a positive outlook for the largest centralized crypto exchange on the market.
The article Binance is investigated in France for alleged money laundering was first seen on BeInCrypto Brasil.