While the European Union pushes for a digital euro to counter the dominance of US dollar-backed stablecoins, the Trump administration is doubling down on policies that strengthen the dollar’s position in digital assets. At the same time, Binance, the world’s largest cryptocurrency exchange, is facing renewed legal challenges in France over allegations of money laundering and tax fraud. Binance Faces New Legal Challenges in France Amid Broader Scrutiny Across the EU The world’s largest cryptocurrency exchange, Binance, finds itself once again at the center of legal and regulatory investigations as French authorities launch an inquiry into allegations of money laundering and tax fraud. This latest challenge adds to the mounting scrutiny the platform has faced from governments worldwide in recent years. On Jan. 28, French authorities reportedly opened an investigation into Binance over suspicions of money laundering linked to drug trafficking, as well as tax fraud. The probe spans a period from 2019 to 2024 and extends beyond France to encompass all European Union member states. This is not Binance’s first encounter with French regulators. The company has been under scrutiny in the country since 2022, primarily for allegedly insufficient Know Your Customer (KYC) measures. French authorities have raised concerns over the exchange’s ability to monitor and prevent potential money laundering activities—a recurring theme in Binance’s global regulatory challenges. In response to this latest development, a Binance spokesperson described the investigation as part of an ongoing legal probe dating back years. “Binance is deeply disappointed to learn that JUNALCO, a Paris division of the French Public Prosecutor’s Office, has taken the decision to refer this matter, which is several years old, to the French judiciary for further investigation,” the spokesperson said. While expressing disappointment, Binance firmly denied the allegations and vowed to contest the charges vigorously. The exchange emphasized its commitment to improving compliance and maintaining the safety and security of its users. The investigation in France is just one chapter in Binance’s ongoing legal battles worldwide. Between 2021 and 2025, Binance faced regulatory scrutiny in at least 10 countries, with allegations ranging from violations of Anti-Money Laundering (AML) laws to operating without proper licensing. From 2023 to 2024, the exchange ran afoul of regulators in six nations, including Australia, Belgium, Canada, India, Nigeria, and the United States. The most notable case occurred in the US, where Binance agreed to a record-breaking $4.3 billion settlement with the government in 2023. The settlement addressed accusations of breaching AML regulations and functioning as an unregistered money transmitter. Binance CEO Richard Teng acknowledged that the company experienced “gaps in compliance” as it rapidly scaled its operations. From its early days as a small team of six, Binance has grown into a global behemoth, serving over 166 million users by the end of 2023. Teng referred to these compliance issues as “historical,” stressing that user funds and security remain a top priority for the platform. Efforts to Rebuild Trust: Compliance Overhaul and Expansion In response to its mounting regulatory challenges, Binance has taken significant steps to strengthen its compliance infrastructure. By November 2024, the exchange had expanded its compliance team to 645 full-time employees, marking a 34% increase in headcount. This investment is part of Binance’s broader strategy to align with global regulatory standards and rebuild trust with users and authorities alike. The company has also implemented rigorous Anti-Money Laundering protocols, which it claims have been recognized by prominent agencies such as the Financial Crimes Enforcement Network (FinCEN), the US Department of Justice, and the Office of Foreign Assets Control (OFAC). Binance’s spokesperson highlighted these advancements as evidence of its “intensified commitment to regulatory adherence” and its “ongoing transformation” since the 2023 US settlement. Despite these efforts, the exchange continues to face skepticism from regulators and governments worldwide. The French investigation shines the spotlight on the difficulty Binance faces in overcoming its troubled regulatory history, even as it works to demonstrate its commitment to compliance and transparency. Binance’s latest legal troubles in France come at a time when the cryptocurrency industry is grappling with increasing regulatory scrutiny across the globe. Governments are tightening their oversight of digital assets, driven by concerns over their use in illegal activities such as money laundering, tax evasion, and fraud. As Binance processes billions of dollars in daily trading volume—over $21 billion on Jan. 27 alone, according to CoinGecko —it remains under the microscope as a leader in the crypto space. Its prominence and scale make it a prime target for regulators seeking to enforce stricter rules on the industry. While Binance continues to deny allegations and emphasize its compliance advancements, the outcome of these investigations will likely shape the exchange’s future and its role in the evolving cryptocurrency ecosystem. For now, Binance faces a precarious balancing act: navigating legal challenges, addressing regulatory concerns, and maintaining the trust of its massive user base—all while continuing to operate as the world’s largest cryptocurrency exchange. Trump’s Executive Order on Digital Finance Escalates EU Concerns Over Dollar Dominance In other news, the ongoing geopolitical battle over digital financial technology has intensified as US President Donald Trump’s executive order (EO) on “Strengthening American Leadership in Digital Financial Technology” raises alarms in the European Union. The order, which aims to bolster the US dollar’s dominance through the promotion of dollar-backed stablecoins, has prompted European policymakers to double down on the development of the digital euro as a counterbalance. During the 13th ILF Conference on the Future of the Financial Sector in Frankfurt on Jan. 24, European Central Bank ( ECB ) executive board member Piero Cipollone emphasized the need for a European response to the global rise of dollar-backed stablecoins. Cipollone noted that US dollar stablecoins currently account for 97% of the global stablecoin market, valued at $215 billion, according to CoinGecko. This overwhelming reliance on dollar-backed assets has become a critical concern for Europe’s financial and strategic autonomy. Cipollone’s also touched on Europe’s dependency on international card schemes, which settle over 60% of card payments in the EU. Additionally, mobile app payments in Europe have grown significantly, rising from a 1% share of retail payment transactions in 2019 to 9% by 2024. President Trump’s executive order shows the US government’s commitment to reinforcing the US dollar’s dominance in the global financial system. By promoting lawful and legitimate dollar-backed stablecoins, the Trump administration aims to solidify the dollar’s sovereignty in the digital age. “Strengthening American leadership in digital financial technology is critical to our nation’s economic future,” the executive order states. “This includes actions to ensure the global prominence of the US dollar through the growth of stablecoins.” However, the EO takes a firm stance against central bank digital currencies. It prohibits the issuance and circulation of CBDCs within the United States, a move that contrasts sharply with the EU’s approach. Analysts suggest this prohibition is a strategic decision to preserve the dollar’s status as the world’s reserve currency while curbing the development of competing digital currencies globally. The Trump administration’s aggressive support for dollar-backed stablecoins has placed the European Union in a precarious position. Cipollone’s call for a digital euro reflects broader concerns that the US dollar’s dominance in the stablecoin market could erode Europe’s financial independence. By launching a CBDC, the ECB aims to safeguard European citizens’ access to central bank money and maintain the role of European banks in the financial system. Cipollone also highlighted the risks of a fragmented global financial system, warning that the dominance of US dollar stablecoins could make Europe vulnerable to external economic shocks. A Strategic Tug-of-War The Trump administration’s strategy to promote dollar-backed stablecoins and block CBDC development is widely viewed as a move to maintain the US’s economic and geopolitical power. Legal expert David Lesperance suggested that the executive order is less about fostering innovation and more about preserving the dollar’s dominance. “In the crypto executive order, broad statements are meant to put the US at the forefront of the development of digital financial assets and infrastructure,” Lesperance said in an interview. “However, that support ends if any of those developments threaten the USD as the world’s reserve currency.” Lesperance speculated that Trump might use the US’s economic leverage, such as the threat of tariffs, to pressure the EU and other economies into adopting similar bans on CBDCs. Such a move could hinder global efforts to develop alternative digital currencies, leaving the US dollar as the uncontested leader in the digital financial landscape. The growing competition between the digital euro and US dollar stablecoins sheds light on a broader struggle for dominance in the future of finance. While the Trump administration seeks to entrench the dollar’s supremacy, the European Union is betting on the digital euro to secure its financial independence and maintain global influence. As the debate unfolds, the stakes are high. The outcome will not only shape the trajectory of digital financial technology but also redefine the balance of economic power between the US and the EU. For now, the world watches closely as two of the largest economic blocs navigate this critical juncture in the evolution of money.
