Binance faces mounting pressure in France following executive departures and compliance failures, leading to market withdrawal in 2024.
The exchange confronts parallel legal challenges globally, with US prosecutors targeting anti-money laundering violations and sanctions breaches.
Regulatory crackdown extends industry-wide as authorities worldwide demand stricter compliance, impacting major crypto platforms.
In a surprising move, French investigators have officially started a judicial probe into Binance, the world’s largest cryptocurrency exchange. to Reuters, the authorities have filed charges of money laundering, tax fraud, drug trafficking, and other financial crimes against the exchange. This marks a significant escalation in the strained relationship between Binance and French authorities.
The Start of the Binance Investigation
The tension between Binance and French regulators is not new. In 2023 the French government launched a preliminary investigation into the trading platform. At the heart of the issue were accusations that Binance provided illegal crypto services to French citizens without regulatory approval.
Additionally, the exchange was criticized for failing to implement adequate anti-money laundering (AML) measures. This raised concerns about the platform’s role in facilitating illicit activities.
Amid ongoing regulatory issues, Coinspeaker that Stéphanie Cabossioras has left her job as the executive director of Binance France. She was one of at least ten executives to resign in 2023, raising concerns about Binance’s stability during these challenges.
As these accusations gained momentum, French regulators intensified their scrutiny. Binance’s inability to comply with local laws ultimately forced the platform to withdraw from the French market in 2024.
The judicial probe has brought the situation to a boiling point, suggesting that the exchange’s troubles in France are far from over. According to a from The Block, citing a Binance spokesperson, the initial investigation is being escalated by JUNALCO, a Paris division of the French Public Prosecutor’s Office.
The spokesperson noted that Binance will “vigorously fight any charges made against it. Binance’s advances in AML and compliance have already been recognized by leading authorities, including FinCEN, the DOJ and OFAC, among other things noting that Binance has ‘implemented enterprise-wide AML/CFT,’ ‘implemented Financial Action Task Force standards for AML and KYC’ and ‘improved employee AML/CFT training.’”
A Global Pattern of Scrutiny
Binance’s legal problems extend far beyond France. In the United States, the crypto giant has faced similar accusations. US prosecutors charged Binance and its ex-CEO, , with violating anti-money laundering laws and sanctions regulations.
These allegations included operating without proper oversight and enabling users to bypass financial restrictions. Binance has always denied doing anything wrong, but these investigations have hurt its reputation.
Critics say the company grew too quickly in many markets without following the rules properly. Because of this, some accused Binance of allowing illegal activities while claiming to focus on innovation.
Meanwhile, this regulatory crackdown pattern is not isolated to Binance alone. Governments worldwide have ramped up regulatory efforts to address concerns about the crypto industry’s potential role in facilitating illegal activities.
Regions from Europe to Asia and North America hold crypto platforms accountable, forcing them to prioritize compliance over expansion. In a recent update, KuCoin Exchange has settled with the United States Department of Justice (DOJ) for unlicensed money transmitter business. The exchange to pay $300 million to settle these charges, with its co-founders Chun Gan and Ke Tang resigning.
This crackdown and Binance’s situation in France also raise broader questions about the future of crypto exchanges in heavily regulated markets. As governments worldwide tighten their grip on the crypto industry, exchanges must prioritize legal compliance over rapid growth.
