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Binance Spain Faces Court Probe Over Fund Misuse Allegations

Coin WorldThursday, Jan 30, 2025 4:03 pm ET

1min read

Madrid Court to Investigate Binance Spain Over Fund Misuse

The Madrid Court has initiated an investigation into Binance Spain SLU, the Spanish subsidiary of global cryptocurrency giant Binance, following allegations of fund misappropriation. A Spanish businessman has accused the platform of locking his funds and denying him access, leading to a loss of 67,550 euros. The judge, María de los Ángeles Velázquez, has determined that there is sufficient criminal evidence to proceed with the case.

The businessman, represented by lawyer María Victoria Vega from Auren, attempted to recover his funds through two bureau fax requests before filing a lawsuit. However, Binance allegedly did not respond to these requests. Judge Velázquez has ordered Binance's founder, Changpeng Zhao, to present himself for testimony during the investigation, but he has not appeared in court yet. The case is at a critical juncture, with all involved parties required to submit criminal charges or seek dismissal within a 10-day window.

Binance has not provided any statements regarding the case, as it is still under legal consideration. This legal problem adds to Binance's existing regulatory challenges. Despite these issues, Binance remains the global leader among crypto exchanges. In November 2023, Changpeng Zhao pleaded guilty to money laundering charges during an American trial and stepped down from his CEO position. In December 2024, the Australian branch of Binance faced investigations for improperly labeling retail customers as wholesale clients, increasing their risk exposure.

Since the summer of 2022, Binance Spain has operated as a registered entity with the authority of the Banco de España. The outcome of this ongoing court case could significantly impact Binance's business operations throughout Spain and other locations. The increased regulatory scrutiny across cryptocurrency markets highlights the importance of compliance for crypto sector operations. A forthcoming Madrid court ruling has the potential to set legal standards that other countries might follow when taking legal measures against crypto exchanges.

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