Binance Probed by France for Alleged Illegal Practices (2024)

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Binance Probed by France for Alleged Illegal Practices? ›

France investigates Binance over money-laundering, canvassing breaches. PARIS, June 16 (Reuters) - Binance is under preliminary investigation for illegal canvassing of clients and money-laundering, the Paris prosecutor's office said on Friday, the latest in a series of setbacks for the world's largest crypto exchange.

Binance allowed more than 1.5 million virtual currency trades, totaling nearly $900 million, that violated U.S. sanctions, including ones involving Hamas' al-Qassam Brigades, al-Qaeda and Iran, prosecutors have said.

“Our team of investigators uncovered that Binance disregarded anti-money laundering Know Your Customer laws, failed to register as a money transmitter, and willfully violated U.S. sanctions tied to the International Emergency Economic Powers Act. When you do so, your business becomes a playground for bad actors.

France is the first European country to give Binance regulatory approval.

The SEC sued Binance Holdings Ltd., BAM Trading Services, BAM Management U.S. and Binance founder Changpeng "CZ" Zhao last year, alleging that Binance Holdings (the entity behind the bigger, global cryptocurrency exchange) and BAM Trading (which does business as Binance.US) are violating U.S. securities laws.

The SEC said in a press release on Monday that the exchange's online pages were found to have offered an investment and trading platform without the necessary license from the financial watchdog.

Government and law enforcement agencies can use this system to submit information requests. Binance will review each case and cooperate on a case-by-case basis to disclose information as legally required, in accordance with our Terms of Use and applicable laws.

Binance agreed to pay $4.3 billion in November to settle with the Department of Justice and the Commodity Futures Trading Commission over illicit finance breaches.

Depending on the reason for the shutdown, Binance could face legal actions, asset freezes, or hacking attempts that could jeopardize the security and availability of the funds. Users who store their crypto assets on Binance would risk losing their money or having to wait for a long time to get it back.

Is Binance under investigation in France accused of money laundering? ›

Binance Under Investigation in France, Accused of 'Aggravated' Money Laundering. Binance is under investigation by local authorities for the "illegal" provision of digital asset services and "acts of aggravated money laundering," the Paris public prosecutor's office has confirmed to CoinDesk.

However, certain states, including Hawaii, New York, Texas, and Vermont, have chosen not to support Binance within their jurisdictions. These states impose restrictions that prevent residents from accessing Binance's services, creating a gap in accessibility for crypto enthusiasts and investors.

French law regulates the sale of digital assets, including promotional communication, to protect investors. This regulation applies to both unlicensed DASPs and token issuers without an AMF visa. DASPs without optional licenses are prohibited from direct solicitation to obtain an agreement on digital assets services.

On June 13, 2023, Binance.US began its transition to a crypto-only exchange, which means we no longer accept USD deposits and withdrawals for the time being — until we are able to secure stable banking partners. Binance.US completed this transition on July 21, 2023.

Binance has been under investigation since at least 2018. Federal prosecutors requested access to internal documents, data on anti-money laundering initiatives, and correspondence between Zhao and others in December 2020.

All U.S. dollar deposits at Binance.US are held at custodial bank accounts and insured up to $250,000 for bank failure by the Federal Deposit Insurance Corp. But Binance.US does not have private insurance for crypto deposits held on its services.

An appeals court revived a putative class-action lawsuit filed by a group of crypto investors against Binance last week, ruling that a district judge had erred in dismissing the case as being filed in the wrong jurisdiction and after the statute of limitations had expired.

A federal appeals court on Friday revived a lawsuit where investors accused Binance, the world's largest cryptocurrency exchange, of violating US securities laws by selling unregistered tokens that lost much of their value.