French investigators have opened a judicial probe into Binance, the world’s largest cryptocurrency exchange. The probe, announced on January 28, 2025, by Reuters, focuses on allegations of money laundering, tax fraud, and drug trafficking.
The Scope of Probe Into Binance
The new probe isn’t Binance’s first encounter with French authorities. In 2023, authorities allegedly announced a preliminary investigation into the exchange.
This was on allegations that the crypto giant was providing illegal crypto services and failing to implement a proper anti-money laundering framework.
The Paris Public Prosecutor’s Office’s Economic and Financial Crime section (JUNALCO) spearheaded the most recent investigation. The organization has covered various alleged misconduct from 2019 to 2024.
Besides France, the investigation encompasses activities across the European Union, revealing the far-reaching implications.
Binance is accused of four allegations:
- Money laundering tied to drug trafficking
- Tax fraud
- Unlicensed provision of digital asset services
- Failure to implement proper anti-money laundering controls
The probe is claimed to come against the backdrop of user complaints about financial losses and misleading information.
Moreover, the authorities claim that Binance operated without proper registration or licensing from the Autorité des Marchés Financiers (AMF), France’s financial markets regulator, during the period under scrutiny.
This is not Binance’s first tango with regulatory challenges in different jurisdictions. For example, Binance and its former CEO Changpeng “CZ” Zhao faced charges from the US Department of Justice in 2023, resulting in a record $4 billion fine and CZ’s resignation.
The global exchange also withdrew from several European markets, including the Netherlands, Belgium, the UK, and Germany, amid stringent anti-money laundering requirements.
Implications for the Crypto Industry
This investigation could complicate the exchange’s expansion plans since France is a significant territory for Binance within Europe. Additionally, it could compromise its ability to secure authorizations under the Markets in Crypto-Assets (MiCA) framework.
The market share among non-USD exchanges dropped from 70% at the start of 2023 to less than 45% in early 2025. With this investigation, it could see further drops in market share.
The continuous regulatory controversy could negatively impact investor confidence in the Binance exchange and the broader cryptocurrency market.
Finally, it highlights the consistent struggle of cryptocurrency exchanges to align with traditional financial regulations, particularly in anti-money laundering and know-your-customer (KYC) practices.
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