Binance in Trouble in France After Netherlands Exit

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  • Binance is in trouble in France following its hasty Netherlands exit
  • The company has been accused by regulators of operating without a license
  • Binance failed to obtain a Dutch license and is shutting up shop

Binance faces yet more regulatory battles after France raised formal objections to its operations on Friday following the exchange’s abrupt exit from the Netherlands. Coindesk reported last week that the French financial regulator, the AMF (Autorité des Marchés Financiers), had accused the exchange of conducting “aggravated money laundering” despite having a Digital Asset Service Providers (DASP license), which came on the same day as Binance said it was leaving the Netherlands after failing to acquire the Dutch equivalent.

Binance Accused of “Aggreavted Money Laundering”

France introduced its DASP license as part of its regulatory framework for cryptocurrencies and digital assets in May 2019, with Binance receiving its license in May 2022. This license allowed Binance to legally operate as a digital asset service provider in France and offer its services to customers within the country.

However, prosecutors have accused the exchange of operating as if it had a license before it had actually obtained one, including being involved in “aggravated money laundering by taking part in investment operations, concealment and conversion, the latter being carried out by perpetrators of offenses having generated profits.”

Binance CEO Changpeng Zhao responded to these suggestions by calling the report “FUD”, saying that the same visit it received was also received by other entities and that Binance is cooperating fully with the investigation:

The irony of this case is that Zhao said during last year’s Paris Blockchain Week that the city is “probably … the financial hub for crypto in Europe and the larger part of the world.”

Binance Leaves the Netherlands

News of the French investigation came on the same day as Binance announced that it is leaving the Netherlands after it failed to obtain clearance from the Dutch financial regulator to operate. All Dutch crypto entities need a Virtual Asset Service Provider (VASP) license to operate and Binance announced last week that it has failed to gain such clearance, although naturally failed to state why.

Binance announced the news on its website, outlining that it will no longer be accepting new registrants and telling current users what to do next:

Starting from 17 July, 2023, existing Dutch resident users will only be able to withdraw their assets from the Binance platform. No further purchases, trades or deposits will be possible. We encourage those users to take appropriate action by withdrawing assets from their accounts.

Binance is of course also facing huge pressure from regulators in the United States, with the future of the company looking more and more questionable with every passing week.