French authorities investigate Binance over alleged money laundering, tax fraud, drug trafficking: report

French authorities stated they created a judicial probe investigating the crypto exchange Binance over alleged money laundering, tax fraud, drug trafficking and other charges, reported Reuters on Tuesday. 

The probe came from the National Jurisdiction for Combating Organized Crime (JUNALCO), a section within the Paris public prosecutor's office targeting financial crime. The investigation follows France's prior investigation in Binance regarding supposed illegal canvassing of clients and money laundering, as Reuters reported in June 2023. The French newspaper Le Monde also wrote at the time that the country investigated Binance over purported failures in its know-your-customer (KYC) obligations in 2022. 

"At this stage, the investigation shows that Binance allegedly failed, over the period of events in question, in its vigilance obligations in the fight against money laundering and the financing of terrorism," according to a translated release from the Paris public prosecutor's office. "The investigations focus in particular on the manner in which Binance met or failed to meet its obligations regarding customer knowledge, thus making the group likely to have contributed to the habitual laundering of sums from various offenses, particularly drug trafficking and tax fraud." 

"It also emerged that the Binance platform sent promotional communications to customers residing or established in France, via influencers and using advertising campaigns on social networks, before Binance was registered as a digital asset service provider ( with the Autorité des Marchés Financiers, without the knowledge of the regulatory authorities and in violation of the applicable law," the translated release continues.

The Block reached out to Binance and France's Judicial Investigation Service of Finance for comment. 

Binance responds

“Binance is deeply disappointed to learn that JUNALCO, a Paris division of the French Public Prosecutor’s Office, has taken the decision to refer this matter, which is several years old, to the French judiciary for further investigation," a spokesperson for Binance told The Block.

"While we do not usually comment on legal proceedings as a matter of policy, Binance fully denies the allegations and will vigorously fight any charges made against it. Binance’s advances in AML and compliance have already been recognized by leading authorities including FinCEN, the DOJ and OFAC, among other things noting that Binance has 'implemented enterprise-wide AML/CFT,' 'implemented Financial Action Task Force standards for AML and KYC' and 'improved employee AML/CFT training.'"

Binance faced scrutiny for money laundering in the United States as well. In November 2023, the exchange, as well as its then-CEO Changpeng Zhao, pleaded guilty to money laundering, with Binance agreeing to pay a $4 billion fine and Zhao yielding to a $50 million fine and four months in prison, The Block previously reported. 

Binance is the largest crypto exchange by monthly spot volume, according to The Block's Data Dashboard. The firm brought in $1 trillion, or 34% of December's $2.94 trillion spot market volume. 

Update Jan. 28, 17:26 UTC: Includes statements from the Paris public prosecutor's office.