French Authorities Launch Investigation Into Binance Over Money Laundering and Tax Fraud

If Europe stands for something, it’s overregulation and bureaucracy, and of all the European countries, France always lead the way in these. French prosecutors have initiated a judicial probe into cryptocurrency exchange Binance, alleging involvement in money laundering, tax fraud, and connections to drug trafficking. The investigation, led by the Paris Public Prosecutor’s Office, scrutinizes Binance’s activities from 2019 to 2024.

Key Allegations

Money Laundering Linked to Drug Trafficking
- Authorities suspect Binance facilitated financial transactions tied to illicit drug operations.
Misrepresentation to Users
- Binance reportedly provided misleading information to users, resulting in investment losses.
Tax Fraud
- The platform is accused of failing to meet regulatory requirements, including proper tax filings.

Timeline of Regulatory Scrutiny

2022: French authorities began examining Binance for illegal crypto operations and insufficient anti-money laundering (AML) measures.
2023: Binance faced mounting pressure and eventually exited the French market.
2024: Former CEO Changpeng Zhao (CZ) served four months in federal prison in the U.S. after pleading guilty to AML violations.
January 2025: French prosecutors escalate their investigation into Binance’s alleged role in financial crimes.

Binance’s Response

A Binance spokesperson denied the allegations, stating:”Binance fully denies the allegations and will vigorously fight any charges made against it.”
The company characterized the claims as “several years old” and unrelated to current operations.

Broader Implications

International Challenges

Binance faces legal challenges in multiple jurisdictions:

United States: Accused of violating AML and sanctions laws, leading to significant penalties.
Australia: Legal action over misclassifying retail investors as wholesale clients.
Nigeria: A senior compliance officer was detained on money laundering charges in 2024.

Impact on Binance Coin (BNB)

Despite the investigation, BNB traded steadily at $670 following the news. Analysts note a potential bullish pattern, predicting a rally toward $1,147.

Industry and Market Outlook

The investigation highlights the increasing regulatory scrutiny of cryptocurrency platforms worldwide. French regulators continue to enforce stringent measures while allowing licensed crypto firms to operate. Binance’s ongoing legal troubles underscore the challenges crypto exchanges face in navigating global compliance frameworks.