- Germany’s financial authority, BaFin, has reportedly denied Binance, a leading crypto exchange, a sought-after crypto custody license.
- This setback comes as Binance continues to face regulatory pressure across Europe, causing it to retract applications and halt operations in several countries.
Binance, one of the world’s leading cryptocurrency exchanges, has reportedly been dealt a significant blow by the German Federal Financial Supervisory Authority (BaFin). According to a recent report from Finance Forward, Binance’s bid to secure a crypto custody license, a crucial component of its planned expansion within the German market, has been denied.
Securing a crypto custody license would enable Binance to not only expand its operations but also to effectively advertise its services in Germany. BaFin’s decision, therefore, throws a wrench into the exchange’s growth strategy in one of the world’s most robust economies. However, the report leaves it uncertain if the denial was an explicit decision from BaFin or an implied intent communicated during ongoing conversations.
In an official statement, a Binance spokesperson has stated,
“We continue to work to comply with BaFin’s requirements. As expected, this is a detailed and ongoing process. We are confident that we have the right team and measures in place to continue our discussions with regulators in Germany.”
The denial of the license is another ripple in Binance’s rocky regulatory landscape. The crypto exchange has been facing growing scrutiny and regulatory pressures in various European nations. It recently retracted its application for regulatory approval in Austria, withdrew its registration with Cyprus’s securities regulator, and opted to discontinue operations in the Netherlands after a failed attempt at registration. Moreover, it has been ordered to cease operations in Belgium amid allegations from the U.S. securities regulator of running an unregistered trading platform.
Despite these setbacks, Binance has been preparing its European strategy, aiming for alignment with the EU’s impending cryptocurrency regulations. These new rules, known as MiCA (Markets in Crypto-Assets), are set to allow crypto companies to operate across the EU, provided they achieve regulatory approval within one of the member states.
Binance has expressed its commitment to comply with these new regulations, stating,
“Binance remains committed to working collaboratively with regulators around the world and we are additionally focused on getting our business ready to be fully compliant with the new EU rules on crypto-assets (MiCA).”
These regulatory hurdles have led to skepticism about Binance’s ability to maintain its position in the crypto market. However, given its persistent efforts to comply with international standards and its adaptability in the face of regulatory challenges, Binance remains a formidable player in the global crypto arena. The outcome of its ongoing discussions with German regulators and its preparation for the MiCA regulations will play a significant role in shaping its future.