French authorities have opened a judicial investigation into Binance, the world’s largest cryptocurrency exchange. This probe focuses on serious allegations, including money laundering and tax fraud. The investigation unfolds against a backdrop of rising scrutiny on cryptocurrency platforms globally.
The Paris public prosecutor’s office, known as JUNALCO, announced the probe on January 28, 2025. The investigation targets activities from 2019 to 2024, not only in France but across the entire European Union. The prosecutors stated that the money laundering charges are tied to drug trafficking.
In response, Binance vehemently denied the accusations. A spokesperson emphasized that the allegations are “several years old” and promised to vigorously fight any charges. This denial comes amid a tumultuous year for Binance, as its founder, Changpeng Zhao, received a four-month prison sentence in the U.S. for violating money laundering laws. Binance also faced a hefty $4.3 billion penalty in that case.
U.S. prosecutors previously claimed the platform facilitated criminal activities. They reported that Binance failed to report over 100,000 suspicious transactions linked to designated terrorist groups.
In the wake of these allegations, Binance claims to have strengthened its anti-money laundering (AML) and Know-Your-Customer (KYC) practices. The spokesperson noted enhancements in employee training to ensure compliance with global standards.
The French investigation began after users complained about financial losses linked to misleading information provided by Binance. Users alleged that the platform conducted trades without the necessary legal approvals. In June 2023, the Paris prosecutor’s office initiated a preliminary investigation into alleged illegal client canvassing and aggravated money laundering.
Binance faces similar challenges in other countries. Recently, the U.S. Supreme Court allowed a lawsuit against Zhao and Binance to proceed. Investors accuse the exchange of illegally selling unregistered tokens that have since plummeted in value.
In Australia, the corporate watchdog has sued Binance’s local derivatives business, claiming it denied consumer protections to retail customers by misclassifying them as wholesale clients.
The Financial Action Task Force (FATF) has repeatedly warned about the risks of crypto being exploited for criminal activities. After significant turmoil in the crypto industry during 2022, prices have begun to rebound, influenced partly by favorable political sentiment from U.S. President Donald Trump. As investigations continue, the future of Binance hangs in the balance.
