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 has been able to promote its products in France. It is the 37th company to have registered 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 the registration, Binance will significantly expand its activities in France and intends to recruit up to 250 people with a focus on developing cryptocurrencies and blockchain infrastructure,” she said in a statement. If this status change gives new rights to the platform, it also implies obligations. But for users, “it actually does not change much,” says Alexandre Lourimi, tax lawyer at ORWL, a company specializing in digital law.

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No control over the financial strength of the platform

“This registration does not provide an extra level of security,” he adds. Thus, AMF does not verify the reliability of the information that the company may communicate to its customers. “This actor’s equity and financial robustness are not controlled either,” explains Alexandre Lourimi. This registration is not intended to protect investors and consumers, but rather society against terrorist financing and money laundering.

Binance must now ensure that its activities do not contribute to any of them complying with French law. It is on these two points that the AMF and the Prudential Control and Resolution Authority (ACPR) are on guard and performing checks. “The new levels of protection in the fight against money laundering will help increase the adoption of cryptocurrencies in France and in Europe”, assesses David Princay, CEO of Binance France, created after the registration of Binance Group as PSAN .

The platform was launched in 2017 and has not always stood out for its transparency. The location of its headquarters has long been a mystery. After Hong Kong, the finance firm Bloomberg located the company in Malta. Then the Cayman Islands and Seychelles were mentioned. By the end of 2021, it looked like Ireland was finally contacted to host the group’s headquarters.

Opportunity to more easily sue the company

AMF also monitors the integrity and competence of platform managers. In other words, “she checked their resume”, sums up Alexandre Lourimi.

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

As a reminder, mediation is a free service that any user can use by filling out 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, one must expect two developments. Currently, savers should not forget to declare any account opened on a foreign platform. If Binance changes its contractual terms for French users, it will no longer be necessary for them to declare their cryptocurrencies, which are now stored through the platform’s French subsidiary. Taxpayers, on the other hand, must always clearly state their capital gains achieved during the past 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 specific investor, or a collective request on a group of investors, those whose transactions, for example, have exceeded 10,000 euros a year,” explains Alexandre Lourimi.

If Binance refuses to cooperate, “the platform will be fined up to 10,000 euros for failure,” the tax attorney adds.

In addition, as part of its commitments to combat money laundering, Binance will need to identify suspicious transactions and report them to Tracfin. This intelligence service, which is under the authority of the Ministry of Economy and Finance, generally forwards suspicious cases to the tax authorities. But simple Binance users have no need to worry …

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