The Paris Prosecutor’s Office has opened a preliminary inquiry against the biggest cryptocurrency exchange, Binance, on suspicion of illegally canvassing customers and engaging in aggravated money laundering.
The latest news comes from the French daily newspaper Le Monde was published on Friday, June 16, and the announcement comes shortly after Binance said that it would be leaving the Netherlands because it had been unable to secure a license demonstrating that the firm complies with the anti-money laundering (AML) rules of the nation.
Additionally, the exchange submitted an application to terminate its registration with Cyprus’ securities regulator, citing that it was concentrating “on fewer regulated entities in the EU.”
“In France, on-site visits by regulators and inspectors are part of regulatory obligations to which all financial institutions must adhere. We had an on-site visit last week by the relevant authorities,” a Binance spokesperson said.
The spokesperson added:
“We will not comment on the specifics of law enforcement or regulatory investigations except to say that information about our users is held securely and only provided to government officials upon receipt of documented appropriate justification.”
Binance’s setbacks continue
The string of setbacks for Binance continues this month after a judgment on June 5 by the United States Securities and Exchange Commission (SEC) to accuse the business of violating securities laws, the company is reportedly being investigated.
France instructed Binance back in November 2021 to focus on AML compliance before expanding to the country. Notably, Binance said in May of 2022 that it has registered with France’s market regulator and that it was looking to create a regional headquarters in the country.
In December, a group of cryptocurrency investors in France filed a criminal case against Binance, accusing the exchange of deceiving the general public and marketing its services before it was legally permitted to do so.
It was not apparent if this allegation was what prompted prosecutors in Paris to open a preliminary inquiry into the matter.