Binance Faces Aggravated Money Laundering Charges In France, Key Figure Departs

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In a recent development, Binance, the world’s largest cryptocurrency exchange, is facing serious allegations of “aggravated money laundering” in France. These charges come after a visit by local police to the exchange’s headquarters in the European country on June 16.

Binance Faces French Probe

French prosecutors initiated the investigation into Binance in June 2023, looking into allegations of “aggravated money laundering” and the operation of an unauthorized exchange. 

The raid occurred just days after Binance France President, David Prinçay, stated that the exchange operates under French and European regulators, emphasizing their independence from the events unfolding in the United States.

However, conflicting views have emerged regarding separating the exchange’s assets. While Prinçay and the exchange’s legal team claim that Binance.US assets are separated from the international exchange, the US Securities and Exchange Commission (SEC) argues that Binance user funds are at “significant risk” due to alleged ownership ties between Binance-related companies and founder Changpeng Zhao.

The fallout from these allegations has led to an internal shakeup within Binance. Stéphanie Cabossioras, the Executive Director of Binance France, has reportedly resigned, joining a growing list of high-ranking executives leaving the exchange. This departure of executives raises concerns about the stability and future direction of the company.

Binance announced its registration with France’s market regulator in May of the previous year, with plans to establish a regional headquarters there. 

However, the exchange faced a criminal complaint from a group of French crypto investors in December, accusing it of misleading the public and promoting its services before obtaining legal authorization.

The situation surrounding Binance remains contentious, with founder Changpeng Zhao dismissing the allegations and the police inspection as “FUD” (Fear, Uncertainty, and Doubt). 

Nevertheless, these recent developments have cast a shadow over the exchange, prompting questions about its regulatory compliance and potential impact on the broader cryptocurrency industry.

While the investigation is ongoing, market participants and industry observers closely monitor the outcome, as it could have significant implications for the company’s operations and regulatory oversight of cryptocurrency exchanges.

Significant Decline In EUR-Denominated Volume

In recent months, Binance has experienced a substantial decline in its EUR-denominated weekly spot trading volume. 

According to data provided by Kaiko, a leading provider of cryptocurrency market data, Binance’s EUR-denominated spot volume plummeted to a mere $160 million in October. 

Binance
Binance’s Euro-denominate trading volume decline. Source: Kaiko

This marks a sharp decrease from the $1.3 billion recorded in March, representing the lowest level observed over three years.

The significant drop in trading activity raises questions about the factors contributing to this decline. One key development impacting the company’s operations in the European market is the suspension of on-ramp services by its Euro banking partner, Paysafe. 

Towards the end of September, Paysafe stopped facilitating funds transfer to and from Binance. Paysafe’s suspension of on-ramp services has undoubtedly affected the exchange’s ability to attract and retain Euro-denominated traders. 

Market participants may have been deterred from trading on the platform without a reliable and efficient means of depositing and withdrawing Euros from the exchange.

Binance
BNB’s sideways price action over the past 24 hours on the daily chart. Source: BNBUSDT on TradingView.com

On the flip side, the exchange’s native token, BNB, has experienced notable losses amidst the recent uptrend in the broader cryptocurrency market. The token is trading at $211, reflecting a 0.3% decline over the past 24 hours and a 3.6% drop over the last 30 days.

Featured image from Shutterstock, chart from TradingView.com 

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