“Binance is suspected of illegally providing digital asset services to local customers, and implementing poor money laundering checks, the Paris public prosecutor told CoinDesk.”[1] According to the Paris public prosecutor’s office and CoinDesk, local authorities are looking into Binance’s French branch for providing “illegal” digital asset services and acts of aggravated money laundering.
This situation arises from the presumable fact of operating illegally as a digital asset service provider before it received regulatory approval in May 2022. The exchange is being investigated for “its anti-money laundering procedures and the fact that it advertised its services in the country before it was registered with the financial markets regulator”[2]
As confirmed by the exchange, Binance was visited by the French authorities recently. “We had an on-site visit last week by the relevant authorities. Binance, as always, was fully collaborative and we met our obligations accordingly. We continue to work closely with regulators and law enforcement agencies on all ongoing compliance requirements to uphold high standards,”[3]
The Aggravated money laundering problem relates to the fact that accordingly, Binance has been “taking part in investment operations, concealment and conversion, the latter being carried out by perpetrators of offenses having generated profits”[4] a thing that poses a problem as Binance is registered as a digital asset service provider, with the French financial regulator.
The investigation by the French authorities, exemplifies how they have been wooing crypto exchanges and digital assets firms as the European Union is ready to regulate crypto under its recent Markets in Crypto Assets (MiCA) regulation.
On the other hand, Binance confirmed its failure to obtain the Dutch licence and therefore is likely to quit the Netherlands. Indeed, Binance said “it was leaving the Dutch market after it failed to obtain a licence from the country’s central bank.”[5]
Consequences for the latter seem to appear the next 17th of July when “Dutch residents would only be able to withdraw their assets from the platform and further trading or deposits would not be possible”[6]. As a result, users in the Netherlands were advised to withdraw their funds from their Binance accounts.
All of the previous occurs at the same time that Binance is facing several problems in the US. In the past days, Binance has been sued by the SEC as “The SEC has considered that 61 cryptocurrencies available for investment provided by Binance pass the howey test”[7], which had as a consequence the exclusion of Binance.US from the banking system. Furthermore, the SEC had sought an asset freeze against Binance.US which however is now being compromised by an agreement between Binance and the authorities.
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[1]https://www.coindesk.com/policy/2023/06/16/binance-under-investigation-in-france-accused-of-aggravated-money-laundering/
[2]https://www.theguardian.com/business/2023/jun/16/binance-to-quit-the-netherlands-investigation-france-crypto-exchange
[3]https://www.theguardian.com/business/2023/jun/16/binance-to-quit-the-netherlands-investigation-france-crypto-exchange
[4]https://www.coindesk.com/policy/2023/06/16/binance-under-investigation-in-france-accused-of-aggravated-money-laundering/
[5]https://www.theguardian.com/business/2023/jun/16/binance-to-quit-the-netherlands-investigation-france-crypto-exchange
[6]https://www.theguardian.com/business/2023/jun/16/binance-to-quit-the-netherlands-investigation-france-crypto-exchange
[7] https://bacsociety.com/en/lawsuit-sec-v-binance/
