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The Paris prosecutor’s office has launched a preliminary investigation into allegations of illegal canvassing of clients and money laundering by Binance. This development comes as Binance continues to grapple with regulatory challenges on multiple fronts.
The prosecutor’s office stated that the investigation revolves around “the unauthorised practice of the profession of virtual assets service provider” and “aggravated money laundering.”
Binance has confirmed that it underwent an on-site visit by French authorities last week and asserted its full cooperation throughout the process. A Binance spokesperson emphasised that user information is securely held and only disclosed to government officials with proper justification.
This latest investigation follows recent charges filed against Binance and its CEO, Changpeng Zhao, by the US Securities and Exchange Commission (SEC). The SEC leveled 13 charges against the exchange, including operating an unregistered securities exchange and failing to restrict US customers from its platform.
Binance has strongly disputed these allegations. Changpeng Zhao, a prominent figure in the cryptocurrency industry, responded to news of the French investigation by dismissing it as “FUD” – a term used in the crypto community to refer to negative news.
In May of the previous year, Binance had announced its registration with France’s market regulator, expressing intentions to establish a regional headquarters in the country. However, a group of French crypto investors lodged a criminal complaint against the exchange in December, alleging misleading the public and promoting services before obtaining the necessary legal authorisation.
Apart from the French investigation, Binance has encountered difficulties in other European markets. The company recently announced its withdrawal from the Dutch market, citing an inability to fulfill registration requirements as a virtual asset service provider. Additionally, Binance has applied to be removed from the register of crypto asset service providers in Cyprus.
(Inputs from Reuters)
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