The maelstrom of legal and regulatory trouble continues to intensify for Binance, the world’s largest crypto exchange.
On Friday, the French newspaper Le Monde reported that prosecutors were investigating the company’s branch in France for violating the country’s anti-money laundering laws. The investigation concerns Binance’s allegedly illegal operations as a digital assets provider as well as “aggravated money laundering,” a spokesperson for the SEJF, the French governmental agency responsible for investigating financial crimes, told Fortune in a statement.
Furthermore, the spokesperson said that the investigation has been ongoing for more than a year, after prosecutors from the specialized interregional jurisdiction of Paris referred the case to SEJF in February 2022.
“We abide by all laws in France, just as we do in every other market we operate,” a spokesperson for Binance told Fortune in a statement. “We will not comment on the specifics of law enforcement or regulatory investigations except to say that information about our users is held securely and only provided to government officials upon receipt of documented appropriate justification.”
That same day, Binance announced that it was leaving the Netherlands after the Dutch regulatory agency did not approve the exchange’s application to become a VASP, or virtual asset services provider.
We regret to announce that Binance is leaving the Dutch market as we have been unable to register as a VASP with the Dutch regulator.
We continue to be committed to working collaboratively with regulators around the world and are additionally focused on getting our business…
— Binance (@binance) June 16, 2023
“We regret to announce that Binance is leaving the Dutch market as we have been unable to register as a VASP with the Dutch regulator,” wrote the exchange on Twitter. “We continue to be committed to working collaboratively with regulators around the world.”
News of France’s investigation into Binance as well as the exchange’s withdrawal from the Netherlands follows a bombshell lawsuit that the Securities and Exchange Commission filed less than two weeks ago against the company, its U.S. subsidiary, and Binance’s founder and CEO, Changpeng Zhao.
In the 136-page document, which contained 13 charges, the SEC alleged that Binance.US sold unregistered securities and therefore operated as an unlicensed securities exchange. Moreover, it claimed that Binance subverted controls to “secretly allow high-value U.S. customers to continue trading on the Binance.com platform” despite the service being closed to the region. (The Commodity and Futures Trading Commission made similar accusations in a lawsuit filed in late March.)
“We allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC Chair Gary Gensler said in a statement.
Since then, the company has seen significant net negative outflows, increased pressure on its U.S. subsidiary, and rumors of forthcoming Department of Justice charges.
