Report: French authorities seize 388 BTC from "illegal" exchange

In a story published this morning by Reuters, French officials in Cannes and Nice arrested two men in connection with an “illegal” bitcoin exchange, seizing 388 BTC (roughly $240,000). The men, whose names have not been released, face charges of “illegal banking, money laundering and illegally operating a gambling website.” The exchange’s name and website address were not mentioned in the report.

According to Reuters, a raid last week on one of the suspects’ homes yielded a wealth of evidence about the operation, which appears to have had several potentially criminal elements. A retired policeman alerted investigators after visiting the website, which offered bitcoin purchases and lending. Such activities are illegal without proper licenses in France.

Speaking with reporters, prosecutor Olivier Caracotch said: “It’s the first time in Europe that a judicial action has resulted in the closure of an illegal exchange for virtual currency.”

Bitcoin exists in something of a legal limbo in France, but the issue surrounding the unidentified exchange seems to be less about digital currency and more to do with the operation being completely off the books. French business regulation is heavily enforced by state authorities, as the country has a long and problematic history with smuggling, illegal gambling, terrorist financing and black market operations. Although the closure of a cryptocurrency exchange is new, European finance officials are regularly tasked with closing unlicensed exchanges for foreign currency.