Binance under investigation for money laundering and tax fraud in France

Binance, the world’s largest cryptocurrency exchange, is under investigation in France for money laundering, tax fraud, and more charges.

French investigators announced a judicial probe into money laundering (in connection with drug trafficking), tax fraud and other charges at Binance on Tuesday. The investigation is set to cover the period between 2019 and 2024 and involves offences committed not just in France but also in all EU countries.

The exchange denies the allegations, levelled by the economic and financial crime section of the Paris public prosecutor’s office (JUNALCO).

“Binance fully denies the allegations and will vigorously fight any charges made against it,” a spokesperson for Binance said in an emailed statement to Reuters, saying that the matter was already “several years old”.

This comes after Binance’s founder and former CEO Changpeng Zhao was sentenced to four months in prison last year, after lodging a guilty plea to charges of violating US laws against money laundering. Binance as a company also agreed to pay a $4.3 billion penalty.

At the time, US prosecutors found after a multi-year investigation that Binance had let over 100,000 suspicious transactions with designated terrorist groups go unreported. Now, however, Binance maintains via a spokesperson that the exchange has made advances in anti-money laundering schemes, including adhering to global regulation standards and improving employee training.

The current investigation in France was sparked after complaints were lodged by users claiming they had lost money on the platform after investing due to incorrect communication from the exchange, according to the local prosecutor’s office. The preliminary investigation was opened in June 2023 in Paris over illegal canvassing of clients and “aggravated money-laundering”.

Zhao refuted the investigation at the time in a post on X, claiming the news was “FUD,” a colloquial term used in the crypto industry for negative topics. The French investigation is running in parallel to another case lodged against Binance and Zhao in the US Supreme Court, with investors claiming that Binance is illegally selling unregistered tokens.

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