France Conducts AML Inspections on Binance and Coinbase Ahead of EU Licensing Decisions

France Conducts AML Inspections on Binance and Coinbase Ahead of EU Licensing Decisions

France is conducting anti-money laundering (AML) inspections on multiple cryptocurrency exchanges, including Binance and Coinhouse, as it prepares to grant licenses under the new EU regulations. These inspections are part of broader oversight intended to ensure compliance with the Markets in Crypto-Assets (MiCA) framework.

Key Takeaways

France is inspecting numerous crypto exchanges, including Binance and Coinhouse, to ensure compliance with AML regulations.
The inspections are crucial for obtaining licenses to operate under the EU’s MiCA regulations.
Companies need to address inspection findings to avoid sanctions and secure their licenses by June 2026.
France aims to establish a standardized regulatory approach to crypto across the EU.

France's Overview of AML Inspections

Currently, France is undertaking anti-money laundering (AML) scrutiny on various cryptocurrency exchanges, including major players like Binance and Coinhouse. This is part of an effort to determine which of the over 100 registered entities will successfully secure EU-wide operating permits under the Markets in Crypto-Assets (MiCA) regulation.

As reported by Bloomberg, the French Prudential Supervision Authority (ACPR) has been conducting on-site checks since late 2024, and Binance has been instructed to enhance its risk management systems during this process. Binance stated, "Periodic onsite inspections are a standard part of the supervision of regulated entities."

These checks aim to ensure compliance with the requirements for registering as a Digital Asset Service Provider (PSAN), especially focusing on anti-money laundering and counter-terrorist financing controls. Companies that fail to resolve the findings of ACPR may face penalties or could jeopardize their chances of getting MiCA agreements from France, which are necessary to operate in all 27 EU member states.

The deadline for securing these licenses is June 2026, and so far, only Deblock, GOin, Bitstack, and CACEIS, owned by Credit Agricole, have received approvals.

Binance’s Evolution in France

In May 2024, Binance made significant changes to its leadership as co-founder Changpeng Zhao stepped down, replaced by new shareholders Yulong Yan and Lihua He. This move was necessary to uphold its operational status in France due to regulations that disallow majority shareholders with felony records. Zhao used to own all shares of Binance France. This restructuring is a part of a "global restructuring project" aimed at aligning with regulatory standards, as the MiCA regulation allows companies to operate across EU countries with a single license.

Despite facing two ongoing investigations from French prosecutors regarding potential money laundering and illegal advertising, France remains Binance's strategic hub in Europe. The ACPR's common post-inspection requirements include hiring additional compliance personnel and improving cybersecurity measures, with firms typically given several months to comply. The information collected during these inspections is shared with France's Financial Markets Authority (AMF), which grants MiCA agreements.

Earlier this year, Binance Australia was instructed by Australia’s financial intelligence agency, AUSTRAC, to engage an external auditor after discovering "serious concerns" regarding its anti-money laundering controls.

MiCA’s Variation in Enforcement Across Europe

Unlike Europe, Coinbase recently settled complaints with New York's Department of Financial Services for $100 million due to "historical shortcomings" in regulatory compliance. This settlement included a $50 million fine and an additional $50 million commitment for compliance program investments over the next two years. Since then, Coinbase has rolled out crypto-focused AML tools and an automated Transaction Monitoring System after investigations began in 2021.

For European exchanges like OKX, regulators are contemplating penalties after hackers allegedly laundered $100 million in stolen funds through its Web3 platform. However, ongoing discussions among authorities have questioned whether OKX's integrated services are covered by MiCA regulations, with some suggesting that the company might face operational restrictions or license revocation.

In October, France approved the Lightning Stock Exchange (Lise) as the country’s first fully tokenized equity exchange, securing a DLT TSS license under the EU’s DLT Pilot Regime. This platform combines the roles of a Multilateral Trading Facility and Central Securities Depository on a single, distributed ledger, facilitating instantaneous trading and settlement. Lise aims to introduce its first IPOs in early 2026, targeting small and mid-cap companies that have historically struggled to access public markets. This development positions France as a leading player in the area of tokenized securities, particularly as the tokenization of real-world assets surged past $33.9 billion, experiencing over a 10% increase in just one month.