French authorities have opened a new probe into Binance, the world’s largest cryptocurrency exchange, around allegations that it broke multiple EU laws between 2019 and 2024.

The latest investigation is said to be part of a broader investigation into Binance’s conduct which started in France in 2023. New allegations include money laundering, terrorist financing and tax fraud. The probe is not limited to France and will look at Binance’s activities across the EU jurisdiction.

On Tuesday, the French public prosecutor said Binance was “likely to have assisted in habitual money laundering … in particular drug trafficking and tax fraud.” France’s consumer protection and anti-fraud agencies have now taken over the investigation.

Binance has said it denies the allegations and will challenge any charges that are made against it. It also said the new allegations were part of a continuing process going back several years.

A spokesperson for the company told Cointelegraph: “Binance is deeply disappointed to learn that JUNALCO, a Paris division of the French Public Prosecutor’s Office, has taken the decision to refer this matter, which is several years old, to the French judiciary for further investigation.”

Know your customer failure

According to studies, France and Germany are two of the biggest markets for money laundering, with around $100 billion of dirty money processed in those two countries annually.

At the heart of the latest Binance probe are allegations that the crypto giant failed in its know-your-customer obligations, an EU regulation requiring financial firms to properly identify their clients, customers and suppliers.

French prosecutors are now saying that Binance failed to comply with this regulation, allowing its platform to be used for money laundering in the form of terrorist financing and tax fraud.

The company’s fall from grace in France is in stark contrast with its initial arrival in the country back in 2021, when its bosses were courted by former President Emmanuel Macron at the Élysée Palace.

The company at the time promised to invest €100m in France. The country’s financial watchdog gave it regulatory approval soon after, in contrast to its otherwise strict regulatory stance. But that honeymoon period now seems to be over.

Binance has previously been found guilty of engaging in money laundering by US authorities, where it agreed to pay a fine of more than $4 billion in November 2023.

The UK’s FCA also blocked Binance from promoting crypto services in the country and marketing itself to British customers in October 2023.