Binance France has today published its first audited financial statements. We expect that media and our community of Binancians will be interested to take a look at the financial results of one of our major regional hubs, so we’re taking the opportunity here to provide a little context and a Q&A for what we expect will be some of the most frequently asked questions.

These statements will be published annually in accordance with Binance France’s local regulatory and legal requirements and can be found here. These first audited financial statements cover a 14 month period from November 8, 2021, when the company was created, to the end of the financial year on December 31, 2022.

The audited financial statements show that:

  • Binance France holds ~€1bn in crypto assets on behalf of its users (French resident Binance users)

  • Binance France holds 7M USDT on its own account

  • Binance France recorded a €4M loss in 2022, this is because the accounts cover 14 months of expenses but only six months of revenue. Binance France only received revenue after it was able to serve users on receipt of regulatory approval from the AMF, approximately halfway through 2022. Meanwhile, Binance France incurred operating costs starting in November 2021

  • Binance France’s income primarily consists of trading fees

  • Binance France projects that it will be in profit in its 2023 accounts with a combined 12 months of income and expenses

  • The financial statements were audited by RSM Paris.

Without further ado, let’s get into the FAQ:

Why has Binance France recorded a loss? Is Binance a loss making business?

This is because the accounts cover 14 months of expenses but only six months of revenue. Binance France only operated as an exchange following acquisition of regulatory approval from the AMF, this meant that in 2022, it was only receiving revenues from July onwards. Although not yet operational, Binance France had operational costs starting in November 2021 which are included in these statements. Had this covered a full year, Binance France would show profit. Globally, Binance remains a profitable business.

Why do the accounts show full year expenses but only half year revenue?

Binance France received its VASP registration in May 2022. Following that, French resident users signed new terms and conditions with Binance France from July 2022, and as such, became clients of Binance France. When they became clients of Binance France, the entity started to receive the revenues generated from these clients in its accounts. However, expenses (including the costs associated with its registration) started from the creation of Binance France in November 2021.

Why is this financial year starting from November 2021?

These financial statements cover the period from November 2021, which is when Binance France was established, to December 2022, the closing of the financial year. Financial reporting for 2023 will cover January to December.

Operating expenses of €14m is a lot, what was Binance France spending operating expenses of €14m on?

The main expenses consisted of staff costs and related payroll charges, marketing expenses, professional fees, administrative expenses and taxes. Note 9 (page 10) in the audited financial statements has more detail.

Why did Binance France choose RSM and not one of the Big Four?

RSM is a leading audit, consulting and tax firm, with a strong reputation, a presence in 120 countries around the world and a global team of 57,000 people, which is why Binance France decided to onboard RSM as independent auditors.

Binance has had French users for years, how come Binance is only claiming income since mid 2022?

After securing registered status, Binance France was able to provide services to French residents in compliance with French regulations. Through Binance France, French Binance users interact directly with a local, regulated and audited entity.

Why has Binance been audited in France? Shouldn’t the whole of Binance be audited?

Audit requirements are generally driven by local laws and regulations. Any Binance entity required to be audited complies with its obligations. Binance France is not the only Binance entity that has been audited.

In many jurisdictions, private companies are not required to produce financial statements, however we believe that added transparency around assets in custody is a market demand, which is why we have innovated around the Proof of Reserves, where all of our users are able to confirm their assets are held 1:1.