The French arm of Binance, established on November 8, 2021, disclosed its financial statement for the year 2022 on Friday. The leading auditing service firm RSM Paris audited the Binance platform and concluded that the exchange had faced a loss of €4 million in France. It happened because the revenue earned from the exchange’s services was less than its expenses.
The regulatory barriers mainly caused Binance France to bear losses in its initial financial period. Though the crypto exchange entered the French jurisdiction in November 2021, the platform started offering trading and custody service in mid-2022 due to legal limits, resulting in a mismatch in the revenue and cost.
The published statement covers 14 months of expenses from Binance France’s creation in November 2021 to December 2022. On the other side, the crypto exchange started generating income from July onwards, representing a timeframe of six months since the income began.
The French authority, Autorité des marchés financiers (AMF), granted the crypto platform the digital assets 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 14th-month expenses at 14 million, which includes administrators’ salaries, taxes, and professional fees. Similarly, the revenue generated throughout the half year stands at 10 million. A large portion of this earning is raised from the trading fees, Binance affirmed.
The mismatch in revenue and expense is a major factor behind the loss. But Binance expects to earn passive income throughout the 2023 financial year.
Binance Audits To Comply With Regulations
Interestingly, Binance published its accounting details to comply with French crypto rules. It is liable for crypto companies to disclose their accounts publicly under the implied crypto regulations.
Likewise, Binance revealed that it currently holds 7 million USDT in its account. The platform notified about the additional €1 billion of customers’ assets (only French residents) under the management. But it didn’t break down the amount in cryptocurrencies.
Besides the fact that Binance France has disclosed financial statements as part of the regularity compliance and commits to high regulatory standards, the exchange was found suspected of aggravated money laundering one month ago. As it should be, the allegations imposed by the public prosecution office resulted in the French authorities starting preliminary investigations into the Binance.
Implementing Know-Your-Customers (KYC) procedures at exchanges helps monitor crypto users and flag potential money laundering activities. And the latest probe into the exchange by French authority mainly aims to confirm if Binance France has fallen short of the KYC rules.
Featured image from Pixabay and chart from TradingView.com