French banking regulators are conducting additional anti-money laundering (AML) checks on Binance and other cryptocurrency exchanges, as the Paris government seeks greater powers over Europe’s cryptocurrency industry under the Markets in Cryptocurrency Regulation (MiCA).
Bloomberg reported on Friday that the French Prudential Supervision and Resolution Authority (ACPR) is checking anti-money laundering compliance at Binance and “dozens of exchanges.” The report, citing anonymous sources, notes that the testing began last year and is confidential.
Last year, the ACPR reportedly directed Binance in particular to strengthen its risk management. Binance did not respond to Cointelegraph’s request for comment by the time of publication. Still, Bloomberg quoted an exchange representative as saying that “periodic on-site inspections are a standard part of the oversight of regulated entities.”
These inspections are reportedly aimed at ensuring institutions comply with regulations, with a focus on AML and counter-terrorism financing (CFT) rules. As a result of last year’s inspection, Binance was reportedly required to strengthen its compliance and risk management.
Companies typically have several months to address deficiencies, including by hiring additional compliance and information technology staff to strengthen their risk and cybersecurity systems.
Related: EU turns to crypto central oversight as MiCA faces tensions
France goes on a power trip
The new scrutiny comes as France has taken a tougher stance on the crypto industry and signaled its desire to play a bigger role in European regulation. France warned in mid-September that it could try to block crypto companies operating in the country based on licenses obtained in other European countries.
At the time, France’s securities regulator, the Financial Markets Authority (AMF), said it was concerned that unequal standards across the European Union could lead to gaps in regulatory enforcement. This would undermine the regulatory passporting introduced by the European Markets in Cryptocurrency Regulation (MiCA).
AMF President Mary-Anne Barbat Rayani acknowledged that the move would be a serious breach of trust in the European market. Still, she said, “I still reserve that possibility.”
Related: Santander’s Crédit Agricole asset division receives French cryptocurrency custodian license
France wants power over EU cryptocurrencies
Earlier this month, the Banque de France called on the European Union to give Paris-based European Securities and Markets Authority (ESMA) control over the cryptocurrency industry. Central bank governor François Villeroy de Galhau warned against piecemeal oversight.
Gahau argued that relying on national regulators could lead to uneven enforcement across the EU. With the rapid growth of the cryptocurrency industry in the region, the need to consistently enforce the rules is especially acute.
magazine: Telegram CEO unable to leave France, OpenSea receives notice from Wells and more: Hodler’s Digest, August 25-31