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France launches money laundering probe into crypto giant Binance

French prosecutors announced on Friday they had opened an investigation into Binance, the world's largest cryptocurrency exchange, over allegations of unlawful commercial practices, including "aggravated money laundering".

Published: 17 June 2023 10:28 CEST

Binance, Crypto

Cryptocurrency exchange Binance faces a legal investigation in France after allegations that it engaged in illegal commercial practices. Photo by Justin SULLIVAN / Getty Images via AFP

The probe, led by the Paris prosecutor’s office, will look into allegations the French arm of Binance traded illegally in digital assets as well as a separate charge of “aggravated money laundering”, a statement said.

Le Monde newspaper, which first reported the probe, said the company is suspected of failing to respect obligations to ensure its clients were not using the platform for money laundering.

The news follows a move from the US Securities and Exchange Commission which announced this month that it had charged the crypto giant with securities law violations that it said amounted to “an extensive web of deception” and “calculated evasion of the law”.

Binance said afterwards that it was halting US dollar deposits and encouraged clients to withdraw their dollars by early next week.

READ ALSO: Do you pay tax on cryptocurrency in France and if so, how much?

Referring to the French allegations, the company said on Twitter that it had had an “on-site visit last week by the relevant authorities”.

“Binance invests considerable time and resources into cooperating with law enforcement globally. We abide by all laws in France, just as we do in every other market we operate,” it added.

The platform, created in Shanghai in 2017, has cornered much of the crypto-trading market, turning its globe-trotting founder Changpeng Zhao into a billionaire.

But it has long been accused of facilitating money laundering, setting up complex structures to avoid regulation, and busting sanctions – claims it denies.

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What is considered a good salary in Paris?

Centrist Renaissance candidate Sylvain Maillard, running for re-election in France’s snap parliamentary elections, was trying to highlight the high cost of living in the capital in a debate on RMC Radio

“You have extremely expensive rents [in Paris], between €1,500 and €1,700, and then there are all the charges and taxes to pay,” he said.

But what most people seized on was his comment that anyone earning €4,000 a month after tax would not be considered rich in Paris – he predictably was accused of being out of touch with French people’s lives.

There’s no doubt that €4,000 a month is good salary that most people would be happy with – but how much do you need to earn to be considered ‘rich’ in Paris?

National averages

Earlier this year, the independent Observatoire des Inégalités calculated poverty and wealth levels in France.

READ ALSO How much money do you need to be considered rich in France?

According to its calculations, to be considered ‘rich’ in France, a single person with no dependants needs to earn more than €3,860 per month, after taxes and social charges. Around eight percent of single workers have this sum deposited into their bank balance every month, it said.

A total of 23 percent of workers take home €3,000 or more every month, while the top 10 percent clear €4,170.

To be in the top one percent of earners in France in 2024, one person must bring in at least €10,000 per month. After taxes and social charges.

The median income – the median is the ‘middle value’ of a range of totals – of tax households in mainland France is €1,923 per month after taxes and social charges, according to INSEE 2021 data, which means that a ‘rich’ person earns about twice as much as a person on the median income, according to the Observatoire.

Paris situation

About 75 percent of people living in Paris earn less than €4,458 per month, according to Insee data – so according to those calculations, 25 percent of Parisians earn the equivalent of the top 10 percent in France.

But that city-wide average still hides a wide degree of variation. In the sixth arrondissement, the median income is €4,358 per month, after tax. In the seventh, it’s €4,255. Further out, those bringing home €4,600 a month in the 19th and 20th arrondissements are among the top 10 percent in wealth terms.

But still, the median income in Paris is €2,639, significantly higher than the €1,923 France-wide median.

That would mean – using the Observatoire des Inégalités’ starting point for wealth – that a Paris resident, living on their own, would have to bring home €5,278 per month to be considered ‘rich’.

France is a heavily centralised country, with many of the highest-paying industries concentrated within the capital, meaning there is much more opportunity to secure a high-wage job if you live in Paris.

Cost of living

Even these figures should all be taken with a pinch of salt because of the relatively high cost of living in the capital, compared to elsewhere in France. Paris is objectively an expensive place to call home.

In 2023, France Stratégie published a report on the disposable income of French households, after housing, food and transport costs were deducted. It found that, on average, people living in the Paris region had more left to spend, due to higher incomes and despite the fact that housing costs more.

It’s the income paradox in action. A person with a take-home salary of €4,000 per month has more money to spend if they live and work outside Paris. But they’re much more likely to earn that much if they live and work in Paris, where it’s not as valuable.

Someone who earns a ‘rich-level’ salary in Paris might not appear rich – because they live in an expensive area, and a surrounded by very wealthy people in property that’s out of reach all-but the fattest of wallets. But they’re still earning more than twice the median income in France.

And that’s what Sylvain Maillard was getting at, clumsily as he may have expressed it.

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