Binance is under preliminary investigation for illegal canvassing of clients and money-laundering, the Paris prosecutor’s office said on Friday, the latest in a series of setbacks for the world’s largest crypto exchange.
The investigation is about “the unauthorised practice of the profession of virtual assets service provider” and “aggravated money-laundering,” the prosecutor’s office said in a statement.
A Binance spokesperson said Binance had an “on-site visit last week by the relevant authorities” in France. The exchange “was fully collaborative and we met our obligations accordingly,” they said.
“Information about our users is held securely and only provided to government officials upon receipt of documented, appropriate justification,” the spokesperson added.
Binance and its CEO Changpeng Zhao were charged last week by the U.S. Securities and Exchange Commission (SEC) with 13 offences, including operating an unregistered securities exchange and failing to restrict U.S. customers from its platform. Binance disputes the SEC charges.
Zhao, a billionaire who is one of crypto’s most powerful figures, tweeted on Friday in response to a news story on the French investigation, “FUD” – crypto jargon for news perceived as negative. “It’s not ‘news’,” Zhao wrote.
In May last year, Binance said it had registered with France’s market regulator, adding it was seeking to open a regional headquarters in France.
A group of French crypto investors filed a criminal complaint against Binance in December, accusing it of misleading the public and promoting its services before it was legally allowed to do so.
Earlier on Friday, the company said it was leaving the Dutch market because it had been unable to meet registration requirements to operate as a virtual asset service provider.
Elsewhere in Europe, Binance has applied to be removed from Cyprus’ register of crypto asset service providers.
A Binance UK unit, Binance Markets Limited, also asked to be removed from the UK’s equivalent Financial Conduct Authority (FCA) register. It was removed on May 30, leaving Binance with no authorised entities in the UK, the FCA’s website said.
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