Binance: what the PSAN registration actually changes for crypto investors

This is good news for Binance. Since May 4, the largest cryptocurrency exchange platform in the world can promote its products in France. It is the 37th company to have obtained its registration as a digital asset service provider (PSAN) with the Autorité des marchés financiers (AMF). The platform, which claims 90 million users and allows the purchase and exchange of more than 600 cryptocurrencies, does not hide its ambitions.

“Following registration, Binance will significantly expand its operations in France and intends to recruit up to 250 people focused on developing cryptocurrencies and blockchain infrastructure,” she said in a statement. If this change of status offers new rights to the platform, it also implies obligations. But for users, “it doesn’t actually change much,” says Alexandre Lourimi, tax lawyer at ORWL, a firm specializing in digital law.

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No control of the financial strength of the platform

“This registration does not provide an additional level of security,” he adds. Thus, the AMF does not verify the reliability of the information that the company may communicate to its clients. “The equity and financial robustness of this player are also not controlled”, specifies Alexandre Lourimi. This registration is not intended to protect investors and consumers, but rather society from terrorist financing and money laundering.

Binance must now ensure that its activities do not contribute to either to comply with French law. It is on these two points that the AMF and the Prudential Control and Resolution Authority (ACPR) are vigilant and carry out checks. “The new levels of protection in the fight against money laundering will help to increase the adoption of cryptos in France and in Europe”, estimates for his part David Princay, CEO of the company Binance France, created following the Binance Group registration as PSAN.

Launched in 2017, the platform has not always stood out for its transparency. The location of its headquarters has long been a mystery. After Hong Kong, the financial agency Bloomberg located the company in Malta. Then the Cayman Islands and the Seychelles were mentioned. At the end of 2021, Ireland finally seemed to be approached to host the group’s headquarters.

Ability to more easily sue the company

The AMF also monitors the integrity and competence of the platform managers. In other words, “she checked their CV”, summarizes Alexandre Lourimi.

If the simple PSAN registration, which is not an approval granted by the AMF, will not revolutionize anything for investors, it will still make it easier to turn against Binance in the event of a dispute. “Having created a subsidiary in France, Binance will in principle update its general conditions and specify that the accounts are opened on its platform with Binance France”, points out Alexandre Lourimi. Investors will therefore be able to contact the AMF mediator and better assert their rights in the event of a problem.

As a reminder, mediation is a free service that any user can take advantage of by completing the AMF’s online form. If they want to go further, investors will also be able to sue Binance more easily in court.

Two tax changes

On the tax front, two developments are to be expected. Currently, savers should not forget to declare any account opened on a foreign platform. If Binance changes its contractual conditions for French users, it will no longer be necessary for them to declare their cryptos now held via the French subsidiary of the platform. On the other hand, taxpayers must always clearly specify their capital gains made during the last year to the tax authorities.

In addition, the tax authorities will now be able to retrieve information directly from Binance France. “He will be able to formulate a request by name, on a particular investor, or a collective request on a group of investors, those whose transactions have for example exceeded 10,000 euros in the year”, specifies Alexandre Lourimi.

If Binance refuses to cooperate, “the platform will be liable to a fine of up to 10,000 euros for failure”, adds the tax lawyer.

In addition, as part of its anti-money laundering obligations, Binance will have to identify suspicious transactions and report them to Tracfin. This intelligence service, placed under the authority of the Ministry of Economy and Finance, generally forwards suspicious files to the tax authorities. But simple Binance users have no reason to be concerned…

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