French Authorities Open Money Laundering and Tax Fraud Probe Into Binance

French investigators have launched a judicial probe into Binance, the world’s largest cryptocurrency exchange, over allegations of money laundering, tax fraud, and other financial crimes. Binance has denied all accusations and stated it will fight any charges brought against it.

The economic and financial crime section of the Paris public prosecutor’s office (JUNALCO) confirmed in a statement that the investigation includes money laundering linked to drug trafficking. The probe covers alleged offences committed between 2019 and 2024, not only in France but across all European Union countries, according to JUNALCO.

A Binance spokesperson responded in an emailed statement, saying, “Binance fully denies the allegations and will vigorously fight any charges made against it,” adding that the matter was “several years old.”

The cryptocurrency exchange has been under legal scrutiny globally. Binance’s founder and former CEO, Changpeng Zhao, was sentenced to four months in prison last year after pleading guilty to violating U.S. anti-money laundering laws. As part of a settlement, Binance agreed to pay a $4.3 billion penalty. U.S. prosecutors, following a years-long investigation, accused Binance of operating under a “Wild West” model that welcomed criminals and failed to report more than 100,000 suspicious transactions linked to designated terrorist organizations.

In response to the ongoing scrutiny, Binance’s spokesperson highlighted the company’s efforts to strengthen compliance, stating that Binance had made “advances in its anti-money laundering (AML) and compliance,” including the implementation of global regulatory standards for AML and Know-Your-Customer (KYC) checks, as well as improved employee training.

The French investigation was reportedly triggered by complaints from users who claimed they had lost money after investing through Binance. These users alleged they were misled by incorrect information provided by the platform and that Binance was operating without securing the necessary regulatory approvals, according to the Paris prosecutor’s office.

French authorities had already launched a preliminary investigation into Binance in June 2023 over allegations of illegal client solicitation and “aggravated money laundering.” At the time, Binance’s founder Zhao dismissed the news in a post on X, calling it “FUD,” a term used in cryptocurrency communities to describe fear, uncertainty, and doubt spread by negative reports.

Binance is also facing multiple lawsuits and regulatory actions in various countries. Earlier this month, the U.S. Supreme Court allowed another lawsuit against Binance and Zhao to proceed, involving investors who accused Binance of illegally selling unregistered tokens that later lost significant value. In December, Australia’s corporate regulator sued Binance’s local derivatives arm, alleging that the company misclassified retail customers as wholesale clients, thereby depriving them of consumer protections.

Regulators worldwide have repeatedly warned about the role of cryptocurrencies in financial crime. The Financial Action Task Force (FATF), the global body responsible for combating money laundering and terrorist financing, has previously cautioned that digital assets “risk becoming a safe haven for the financial transactions of criminals and terrorists.”

By fLEXI tEAM