France’s AML Inspections and the Future of Crypto Exchanges
Overview of the Situation
France has intensified its scrutiny of cryptocurrency exchanges by conducting anti-money laundering (AML) inspections on several major players, including Binance and Coinhouse. This step is part of the country’s efforts to determine which of the numerous registered entities will ultimately receive EU-wide operational permits under the new Markets in Crypto-Assets (MiCA) regulation. With over 100 entities registered, the stakes are high as regulators aim to ensure compliance and enhance financial security within the rapidly evolving crypto landscape.
The Role of the ACPR
According to reports from Bloomberg, the French Prudential Supervision and Resolution Authority (ACPR) has been actively conducting on-site inspections since late 2024. Among the entities being examined, Binance has been specifically instructed to bolster its risk controls amid the compliance checks. Binance emphasized the standard nature of these periodic inspections, highlighting that they are essential components of the regulatory oversight for all registered entities.
These inspections focus primarily on verifying compliance with the requirements set forth for digital asset service providers (PSAN). The ACPR rigorously tests the effectiveness of companies’ anti-money laundering and counter-terrorist financing controls, ensuring that they meet the minimum regulatory standards.
Consequences of Non-Compliance
Failure to adequately address the findings from ACPR inspections could have serious repercussions for the involved entities. Sanctions may be imposed, and a company’s chance of obtaining the vital MiCA agreements could be jeopardized. Such agreements are crucial for firms hoping to operate seamlessly across all 27 EU member states, making the stakes even higher for compliance.
The deadline for companies to secure these licenses is set for June 2026. To date, only a handful of firms, including Deblock, GOin, Bitstack, and the Credit Agricole-owned CACEIS, have successfully received approval. This limited success rate highlights the challenges the crypto industry faces in adapting to evolving regulatory standards.
Inter-Governmental Cooperation
The increased inspections come at a time when France, alongside Austria and Italy, is advocating for more robust oversight from the EU’s top markets watchdog. This joint effort seeks to tighten rules and ensure that major crypto companies operate under consistent guidelines, addressing the disparities that exist across the bloc.
Binance’s Structural Changes
In a notable move last year, Binance made headlines by replacing co-founder Changpeng Zhao with two new shareholders, Yulong Yan and Lihua He. This shift was crucial for maintaining operational status within France, especially in light of Zhao’s guilty plea for violating U.S. banking laws. French regulations prohibit major shareholders with criminal records, prompting this structural adjustment.
The restructuring is part of a broader “global restructuring project,” aimed at aligning with emerging regulatory standards, particularly as the MiCA framework allows firms to “passport” their licenses across EU nations. Despite facing two investigations from French prosecutors regarding potential money laundering and unauthorized advertising, France remains a pivotal strategic hub for Binance in Europe.
Compliance Recommendations and Requirements
Following inspections, the ACPR typically demands that companies enhance their compliance infrastructure. This includes hiring additional compliance staff and upgrading IT security systems. Companies are generally given several months to comply with these requirements, thereby enforcing a framework within which they must operate to avoid sanctions.
The information collected during these inspections is not kept in isolation; it is shared with France’s Financial Markets Authority (AMF), which ultimately grants MiCA agreements. This collaborative approach ensures that regulatory entities are interconnected, driving a more comprehensive oversight system.
International Perspectives and Approaches
Globally, regulatory agencies are tightening the reins on cryptocurrency platforms. Australia’s financial intelligence agency, AUSTRAC, recently instructed Binance Australia to engage external auditors due to "serious concerns" regarding its anti-money laundering controls. This global regulatory tightening mirrors similar concerns that European regulators share, reinforcing a growing emphasis on compliance.
CEO Brendan Thomas remarked that while businesses may have systems applicable across multiple jurisdictions, they must also reflect local regulatory requirements—a point that underlines the complexity of operating within a global market.
Recent Developments in the Market
In contrast to the regulatory landscape in Europe, Coinbase settled a $100 million agreement regarding "historical shortcomings" with New York’s Department of Financial Services. The settlement underscores the ongoing challenges companies face in maintaining compliance while scaling their operations.
As exchanges like OKX face the prospect of penalties after hackers reportedly laundered $100 million in stolen funds, regulators are assessing whether the exchange’s integrated services fall under MiCA regulations. This uncertainty highlights the evolving nature of both the regulatory environment and the technology underpinning cryptocurrency platforms.
The Rise of Tokenized Securities
Amid these regulatory challenges, France has emerged as a leader in the field of tokenized securities. In October, the country approved Lightning Stock Exchange (Lise) as the first fully tokenized equity exchange, securing a Distributed Ledger Technology (DLT) TSS license under the EU’s DLT Pilot Regime. Lise plans to host its first IPOs in early 2026, targeting small and mid-cap enterprises that have traditionally faced barriers to entry in public markets.
This milestone not only positions France at the forefront of financial innovation but also reflects a growing appetite for real-world asset tokenization, which has surged past $33.9 billion in recent months.
The landscape surrounding cryptocurrency regulation is shifting rapidly, with countries monitoring compliance closely. As France leads the way in implementing robust regulatory measures while fostering innovation, all eyes are on the crypto industry to navigate these complex waters successfully.