Binance Under Fire, French Investigators Launch Money Laundering and Tax Fraud Probe

The world’s largest cryptocurrency exchange, Binance, is once again in the regulatory crosshairs—this time in France, where investigators have launched a judicial probe into money laundering, tax fraud, and other financial crimes.

The probe, led by the economic and financial crime section of the Paris public prosecutor’s office (JUNALCO), spans allegations of money laundering tied to drug trafficking and potential violations of financial regulations across France and the European Union between 2019 and 2024.

Binance has vehemently denied the allegations, dismissing them as “several years old” and vowing to vigorously defend itself against any charges.

This latest investigation adds to Binance’s mounting legal troubles worldwide. The company’s former CEO and founder, Changpeng “CZ” Zhao, was sentenced to four months in prison last year after pleading guilty to violating U.S. anti-money laundering laws. That case saw Binance agreeing to pay a staggering $4.3 billion penalty following accusations of operating with a “Wild West” model that welcomed criminals and failing to report more than 100,000 suspicious transactions linked to designated terrorist organizations.

Binance’s legal battles are far from over:

• United States: The U.S. Supreme Court recently allowed a lawsuit from investors to proceed, accusing Binance of illegally selling unregistered tokens that later plummeted in value.
• Australia: The country’s corporate watchdog sued Binance’s derivatives business, alleging it misclassified retail customers as wholesale clients, stripping them of essential consumer protections.

The French Investigation: What’s at Stake?

French prosecutors initiated the preliminary probe into Binance in June 2023 over allegations of illegal client solicitation and aggravated money laundering. The latest expansion of the investigation follows complaints from users who claim they lost money due to misleading information provided by the platform.

Additionally, authorities suspect that Binance operated in France without securing the necessary financial approvals—a violation that could carry severe penalties if proven.

Binance, for its part, insists that it has made significant strides in compliance, strengthening its anti-money laundering (AML) and Know-Your-Customer (KYC) protocols while implementing global regulatory standards.

The Financial Action Task Force (FATF), an international body combating money laundering and terrorist financing, has repeatedly cautioned that crypto assets could become a “safe haven” for illicit financial transactions.

The industry was rocked by a wave of collapses in 2022, as major firms declared bankruptcy, exposing rampant fraud and misconduct and leaving millions of investors with massive losses.

Yet, despite its turbulent history, the cryptocurrency market has seen record-breaking price surges in recent months, fueled in part by pro-crypto political stances, including those from former U.S. President Donald Trump. Just like any market, there are bad actors which exist and it should not reflect the overall crypto market which is evolving into a booming asset class.

The Big Question: Is Binance’s Future at Risk?

With multiple lawsuits, criminal investigations, and billion-dollar settlements, Binance is under unprecedented pressure. France’s probe could add to its regulatory woes, raising questions about whether the company can maintain its dominance or if these legal battles will erode investor confidence.

The crypto world is watching closely. If Binance’s claims of compliance improvements hold up, it may weather the storm. But if the allegations prove true, it could face crippling penalties or worse, the beginning of the end for its global operations but that seems unlikely.

For now, the burden of proof lies on Binance.

Thomas Lin
UCW Newswire