The world’s largest crypto exchange, Binance is under investigation in Paris, France for allegedly illegal canvassing of clients and aggravated money-laundering. The news comes just two days after Binance announced it will be leaving the Dutch market. Earlier in the week, Binance reportedly applied to deregister from Cyprus’ list of registered crypto exchanges. In the meanwhile, Binance.US is under fire from the SEC.
Paris prosecutor’s office is investigating Binance for allegations of illegal canvassing of clients and aggravated money laundering.
Binance officials responded by saying that “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,” adding that “information about our users is held securely and only provided to government officials upon receipt of documented appropriate justification.”
Earlier this year, the European Union announced it will be implementing a series of regulations on the crypto market to provide better protection and transparency for customers. Among the regulations is the mandatory inclusion of tracing data on transfers between personal wallets and exchange accounts, especially for transfers worth over €1000.
The news might seem great to anyone who operates illegally in crypto trading but might come off as a threat to crypto exchanges that might not be operating ethically.
Earlier this week, Binance announced their de-listing from Cyprus’ register of crypto asset service providers, citing that they want to focus on adapting to the new EU regulations.
The company also announced that it will exit the Dutch market after failing to secure a service provider license. The Virtual Asset Service Provider is a license issued by the Dutch government that affirms that an exchange follows the country’s anti-money laundering (AML) guidelines.
The company’s website said “This, unfortunately, means that no new users residing in the Netherlands will be accepted as of today. Starting from 17 July 2023, existing Dutch resident users will only be able to withdraw their assets from the Binance platform. No further purchases, trades, or deposits will be possible. We encourage those users to take appropriate action by withdrawing assets from their accounts.”
Binance.US and the crypto exchange’s founder, Changpeng Zhao are facing thirteen lawsuits filed by the US Securities and Exchange Commission for alleged crimes that include evasion of US regulators, commingling customer funds, and wash trading.
Crypto legal experts also predict the possibility of Binance and CZ facing federal criminal charges to be filed by the US Department of Justice following the lawsuits filed by the SEC. CZ is preparing for such trials by adding firepower to his legal team.