According to news report, French authorities have been investigating Binance for multiple alleged infractions since February 2022. According to it, the investigation against the largest cryptocurrency exchange is two-pronged.
First, authorities are investigating whether BNB solicited French users and thus operated illegally in the country.
Second, they are looking into “acts of aggravated money laundering, through participation in investment operations, concealment, and conversion, the latter being carried out by perpetrators of offenses having generated profits.”
Aggravated money laundering refers to cases of systematic laundering or large sums of laundered funds involving multiple launderers.
Authorities believe BNB failed to meet its know-your-customer (KYC) and anti-money laundering (AML) obligations, according to local media. It is worth noting that BNB will not require KYC verification until August 2021.
Suspicions of illegal activity
To operate in France, crypto exchanges must obtain a digital asset service provider (DASP) license and register with the Financial Markets Authority (FMA) since 2019. Crypto firms are not permitted to advertise their services to French consumers without a license and registration.
In May of last year, BNB became a fully regulated cryptocurrency exchange in France. According to a local news report, the exchange has been providing services in the country since 2020.
Authorities are likely to suspect that Binance illegally advertised and promoted its services in the country prior to obtaining its license in order to attract potential French users.
Such suspicions are similar to those raised by the Securities and Exchange Commission (SEC) earlier this month against the exchange.
The SEC claimed in its lawsuit that Binance illegally solicited US customers, mixed user and corporate funds, and failed to comply with anti-money laundering regulations.
Binance is working with the authorities
According to a Binance spokesperson, the exchange is working closely with regulators to meet all compliance requirements. The spokesperson went on to say:
“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. “
While the exchange declined to comment on ongoing investigations, the spokesperson stated that French authorities visited Binance last week.
Such visits by regulators and inspectors are part of the country’s regulatory obligations, according to the spokesperson.
According to the prosecutor’s office, the documents and computers seized during the searches of Binance’s offices will be “the subject of an in-depth investigation.”
According to a Binance spokesperson, the exchange’s user information is “securely stored and only provided to government officials upon receipt of documented appropriate justification.”
The investigation comes on the same day that Binance announced its withdrawal from the Netherlands due to a lack of a license.
To read our blog on “Binance, World’s biggest Crypto Exchange likely to face ban,” click here
