The French arm of Binance, which was founded on November 8, 2021, revealed its 2022 financial statement on Friday. Leading auditing services firm RSM Paris has audited the Binance platform and concluded that the exchange faced a loss of €4 million in France. This happened because the revenue generated from the exchange’s services was less than its expenses.
Regulatory hurdles mainly caused Binance France to incur losses in its initial financial period. Although the cryptocurrency exchange entered French jurisdiction in November 2021, the platform began offering trading and custody services in mid-2022 due to legal restrictions, resulting in revenue and cost mismatches.
the published The statement covers 14 months of expenses from the creation of Binance France in November 2021 to December 2022. On the flip side, the cryptocurrency exchange started generating income from July onwards, which is a six-month time frame since the income started.
The French authority, Autorité des marchés Financiers (AMF), granted the crypto platform a Digital Asset Service Provider (DASP) license in May 2022. The company added that it took two months to attract new clients and sign new terms and conditions.
The platform recorded expenses for the fourteenth month at a value of 14 million, which includes administrators’ salaries, taxes and professional fees. Likewise, the revenue generated during the half year amounted to 10 million. Binance confirmed that a large portion of this profit is taken from trading fees.
The mismatch in revenues and expenses is a major factor behind the loss. But Binance expects to generate passive income throughout the 2023 fiscal year.
Binance audits for compliance with the regulations
Interestingly, Binance has published its accounting details to comply with French crypto rules. Crypto companies have a responsibility to disclose their accounts publicly under implicit crypto regulations.
Similarly, Binance revealed that it currently holds $7 million in its account. The platform has reported an additional €1 billion in client assets (French residents only) under management. But it did not detail the amount in cryptocurrency.
Besides the fact that Binance France has disclosed financial data as part of regulatory compliance and adheres to high regulatory standards, the exchange Aggravated money laundering suspect has been found A month ago. As it should be, the allegations imposed by the Public Prosecution Office have led the French authorities to launch preliminary investigations into Binance.
Implementing know-your-customer (KYC) procedures at exchanges helps monitor cryptocurrency users and flag potential money laundering activities. The latest investigation by the French authorities into the exchange mainly aims to confirm whether Binance France does not comply with KYC rules.
Featured image from Pixabay and chart from TradingView.com