PARIS (Reuters) -Binance, the largest cryptocurrency exchange, is under preliminary investigation for both illegal canvassing of clients and aggravated money-laundering, the Paris prosecutor’s office said on Friday, confirming media reports.
“The investigation is about, on one hand, the unauthorised practice of the profession of virtual assets service provider and, on the other, about aggravated money-laundering (…), ” the prosecutor’s office said in a statement.
“In France, on-site visits by regulators and inspectors are part of regulatory obligations to which all financial institutions must adhere. We had an on-site visit last week by the relevant authorities,” a Binance spokesperson said.
“We will not comment on the specifics of law enforcement or regulatory investigations except to say that information about our users is held securely and only provided to government officials upon receipt of documented, appropriate justification.”
The investigation follows various setbacks for Binance including a June 5 decision by the U.S. Securities and Exchange Commission (SEC) to charge the company with evading securities laws. Binance disputes the SEC charges.
Earlier on Friday, the company said it was leaving the Dutch market because it had been unable to meet registration requirements to operate as a virtual asset service provider.
Binance has also applied to be removed from Cyprus’ register of crypto asset service providers.
In May last year, Binance said it had registered with France’s market regulator, adding it was seeking to open a regional headquarters in France.
A group of French crypto investors filed a criminal complaint against Binance in December, accusing it of misleading the public and promoting its services before it was legally allowed to do so.
(Reporting by Benoit Van Overstraeten and Tom Wilson; editing by Frances Kerry and Jason Neely)
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