French Authorities Investigate Binance Over Money Laundering and Tax Fraud

• French probe into Binance highlights serious allegations of money laundering, tax fraud, and compliance lapses since 2019.
• Global investigations expose Binance’s alleged ties to criminal misuse, fueling crypto’s broader scrutiny and regulatory challenges.
• Binance defends itself with reforms but faces criticism for eroding trust; compliance remains critical for industry recovery.

French authorities have initiated an investigation against cryptocurrency exchange Binance over money laundering, tax fraud, and operating without approval. Activity beginning in 2019 through 2024 was covered under the investigation led by JUNALCO, the Paris Public Prosecutor’s division responsible for fighting economic crimes. It shines a new light on potential compliance lapses of Binance throughout the EU.

Deepening Investigations Amid User Complaints

The French probe comes after users accused Binance of misleading communications and financial losses. These complaints caused suspicions of unauthorized trading and aggravated money laundering. JUNALCO linked alleged laundering activities to drug trafficking.

Besides, this scrutiny aligns with broader global investigations. Earlier, U.S. prosecutors accused Binance of failing to report over 100,000 suspicious transactions. These included links to terrorist groups. Binance’s founder, Changpeng Zhao, faced legal repercussions last year, including a $4.3 billion penalty and a prison sentence for violating U.S. anti-money laundering laws.

Regulatory Challenges Escalate Globally

The U.S. Supreme Court in March allowed to move forward another lawsuit against Binance – a proposed class action which included claims of illegal sales of unregistered tokens. Australian regulators separately sued the exchange’s derivatives business, over allegedly lax consumer protection.

Moreover, these investigations spotlight crypto’s broader vulnerability to criminal misuse. Crypto assets could serve as safe havens for illegal financial activity, according to an earlier warning from the Financial Action Task Force (FATF).

Binance Denies Allegations, Highlights Reforms

Despite the mounting pressure, Binance denies wrongdoing. A company spokesperson stated that the claims are outdated and lack merit. Binance emphasized improvements in its anti-money laundering (AML) measures and Know-Your-Customer (KYC) processes. Additionally, the platform highlighted enhanced employee training to meet global regulatory standards.

However, Critics contend that in order to rebuild public confidence, cryptocurrency companies like Binance must put compliance first. The 2022 crypto market crisis weakened trust in digital currencies by exposing pervasive fraud.