France Investigates Binance Over Money Laundering and Regulatory Violations

French investigators announced on Tuesday that they have launched a judicial probe into Binance, the world’s largest cryptocurrency exchange, over allegations of money laundering, tax fraud, and other financial crimes.

The Paris public prosecutor’s office (JUNALCO) stated that the investigation includes money laundering linked to drug trafficking and covers offenses committed in France as well as across the European Union between 2019 and 2024.

Binance has strongly denied the allegations, with a spokesperson stating that the company “fully denies the allegations and will vigorously fight any charges,” according to Reuters. The spokesperson also noted that the matter is “several years old.”

The probe follows complaints from users who claimed they suffered financial losses due to misleading information on the platform. Additionally, the prosecutor’s office reported that Binance had allegedly been operating without the necessary regulatory approvals.

This investigation comes after a preliminary probe was launched in June 2023 over allegations of illegal client solicitation and “aggravated money laundering.” At the time, Binance’s founder, Changpeng Zhao, dismissed the news as "FUD" (fear, uncertainty, and doubt) in a post on X.

Zhao, who stepped down as CEO last year, was sentenced to four months in prison after pleading guilty to violating U.S. anti-money laundering laws. Binance also agreed to pay a $4.3 billion settlement following a lengthy U.S. investigation, which accused the exchange of fostering a “Wild West” environment that enabled criminal activity and failing to report over 100,000 suspicious transactions linked to designated terrorist groups.

Despite these challenges, Binance asserts that it has significantly strengthened its anti-money laundering (AML) and compliance measures. The company claims to have adopted global regulatory standards for AML and Know-Your-Customer (KYC) checks, while also improving employee training.

Beyond France, Binance faces legal action and regulatory scrutiny in multiple countries. Earlier this month, the U.S. Supreme Court allowed a lawsuit against Binance and Zhao to proceed, involving allegations of illegally selling unregistered tokens that later lost substantial value. In December, Australia’s corporate regulator sued Binance’s local derivatives arm, claiming retail investors were misclassified as wholesale clients, thereby losing consumer protections.

Regulators have long cautioned against crypto’s potential role in financial crimes. The Financial Action Task Force (FATF), the global body responsible for combating money laundering and terrorist financing, has warned that crypto assets could become a safe haven for illicit transactions.

The crypto industry faced a major crisis in 2022, with a series of bankruptcies exposing widespread fraud and causing heavy investor losses. However, digital asset prices have surged in recent months, bolstered by former U.S. President Donald Trump’s pro-crypto stance.