Binance, the world's largest cryptocurrency exchange, is under investigation by French law enforcement agency Junalco. It is reported that Junalco opened investigations for a series of crimes attributed to the company, including aggravated money laundering, money laundering from tax fraud, money laundering in relation to drug trafficking and illegal practice of the profession of digital asset service provider (PSAD).

The authorities are investigating Binance's actions between 2019 and 2024, specifically in France, although the events extend indivisibly to all countries of the European Union. The entity maintains that Binance would have breached its due diligence obligations in the context of the fight against money laundering and terrorist financing during the period of the events in question.

The investigations focus in particular on how the cryptocurrency exchange complied or failed to comply with its Know-Your-Customer (KYC) obligations, “making it likely that the group assisted in the regular laundering of sums derived from various crimes, including drug trafficking and tax fraud,” Junalco’s statement said.

The anti-organized crime agency also recalled that Binance “sent promotional communications to clients resident or established in France,” through influencers and using advertising campaigns on social media. This, the office says, was before the exchange registered as a digital asset service provider (PSAD) with the Financial Markets Authority (AMF) “without the knowledge of the regulatory authorities and in violation of applicable law.”

According to Junalco, the investigations will now continue, under the direction of an investigating judge. “And they will have as a particular objective to clarify the scope of the facts, the role of Binance executives and the degree of participation of the different companies in the platform,” the statement says.

This is not the first time that the bitcoin and crypto-asset exchange has faced investigations in France. For a couple of years now, another office, the Specialized Interregional Jurisdiction (JIRS), had already announced an investigation against Binance for the same crimes classified by Junalco .

These investigations reflect a collaboration between different agencies to examine Binance's regulatory compliance and its possible involvement in criminal activities. The consequences for Binance could be severe, as crimes attributed to the platform are punishable by up to 30 years in prison.

Furthermore, these investigations could lead to financial penalties, suspension of operations in certain jurisdictions or even closure of the platform in the worst case scenario.