The world’s largest cryptocurrency exchange, Binance, has just encountered another regulatory hurdle in Europe, as it has withdrawn its application to register with the German banking regulator. This is coming after months of the crypto exchange seeking entry into the European country.
In a statement released by a spokesperson of the crypto exchange, the company lamented the significant change in regulation around the world while stressing its intention to apply again for the Germany license at a future date.
“Binance confirms that it has proactively withdrawn its BaFin application. The situation, both in the global market and regulation has changed significantly. Binance still intends to apply for appropriate licensing in Germany, but it is essential that our submission accurately reflects these changes.”Binance
In June, there were reports that Germany’s Federal Financial Supervisory Authority better known by its abbreviation BaFin, intended to refuse Binance’s application for a crypto custody license. Though the exchange had persisted, it appears it has finally given up on its quest for approval.
This episode is the latest in a series of regulatory troubles the company has found itself in, in recent times. Last month, the company and its CEO, Changpeng Zhao, have been under fire following a lawsuit filed by the Securities and Exchange Commission accusing Binance of conducting a “web of deception.”
Binance and its European troubles
BaFin, Germany’s financial regulatory authority in charge of monitoring banks, financial services institutions, insurance companies, and stock exchanges, informed Binance of its decision not to award the exchange a crypto custody license.
The exchange is also facing other challenges in Europe like how it was reportedly forced to leave the Netherlands because it did not meet the registration requirements to operate as a virtual asset service provider. The company is also under investigation in France.
The company has neither verified nor denied the story, but has allegedly stated that while it is unable to share details of conversations with regulators, it is working to meet BaFin’s standards.
Binance has also withdrawn license applications in Austria, Netherlands, and Cyprus. It also parted ways with its European banking partner- PaySafe last month. It is also being investigated by French officials, who accused the cryptocurrency company of “acts of aggravated money laundering.”
Binance previously touted its willingness to adhere to European Union’s Markets in Crypto Assets (MiCA) legislation, which is in view. Nevertheless, the company has had to withdraw from major countries in Europe and beyond.
According to former workers and internal business correspondence obtained by the Wall Street Journal, Binance reduced certain employee benefits in June as part of re-evaluation efforts within the firm. The exchange highlighted the “current market environment and regulatory climate,” which resulted in a profit drop. It also hinted at other cost-cutting measures being implemented.
The Federal Financial Supervisory Authority of Germany is known as BaFin, an acronym for “Bundesanstalt für Finanzdienstleistungsaufsicht” in German. It serves as Germany’s principal regulatory and oversight body for financial institutions and markets.
Its main goal is to guarantee the integrity, stability, and correct operation of the German financial system, as the financial system should be trustworthy to investors, bank clients, and holders of insurance policies.
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