- German regulator denies Binance’s crypto custody license.
- This reflects a broader trend among regulators worldwide.
- Binance faces regulatory challenges in numerous European countries.
Binance, the world’s largest cryptocurrency exchange, has hit a regulatory roadblock in its European expansion plans. Germany’s Federal Financial Supervisory Authority (BaFin) has denied the company’s application for a crypto custody license.
The decision by the regulator marks a significant setback in Binance’s growth strategy. The move also showcases the growing regulatory scrutiny on crypto across the globe.
Binance’s License Application Denied by Germany’s BaFin
On June 29, 2023, Binance’s application for a crypto custody license was officially denied by BaFin. This decision is a significant setback for the crypto exchange, which planned to expand its operations in Germany.
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While the reasons for BaFin’s denial of Binance’s license application have not been publicly disclosed, it is a part of a broader regulatory trend. Authorities worldwide are increasingly scrutinizing cryptocurrency exchanges to ensure compliance with financial regulations and protect consumers.
The decision also adds to the regulatory pressure Binance faces in several European countries. This includes the Netherlands, France, and the UK, where it has lost licenses and had to exit markets.
Binance’s Regulatory Challenges in Europe
Binance’s regulatory issues extend beyond Germany and encompass several European countries. On June 16, 2023, Binance withdrew from the Netherlands due to regulatory pressure, following a similar exit from the UK. Also on June 16, news surfaced of an investigation by French authorities into Binance, adding to its regulatory woes.
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In addition to these challenges, Binance lost its key European banking partner, PaySafe Solutions. On June 29, the fintech announced it would halt wallet solution services from September 25. This loss of a banking partner further complicates Binance’s operations in Europe.
The regulatory clampdown is not limited to Europe. Binance is also facing regulatory battles in the United States. There, Binance faces separate lawsuits from the Securities and Exchange Commission (SEC) and the Commodities and Futures Trading Commission (CFTC).
On the Flipside
- Despite the regulatory challenges, Binance continues to be one of the largest crypto apps in Germany, with about two million customers.
- Binance is not the only player interested in crypto licenses in Germany. Both Deutsche Bank and Commerzbank applied for crypto custody licenses.
Why This Matters
This development highlights the increasing regulatory scrutiny in the crypto space, which has significant implications for crypto exchanges like Binance.
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