Binance Pulls Out Of EU Crypto Hub Amid SEC Crackdown: What’s Next?

• Binance retracted the application in Cyprus a week after the SEC case.
• BNB dropped by 6.9% in the last 24 hours after a slight depeg of USDT.
• Binance EU units are preparing for the EU’s crypto asset law (MiCA).

The leading crypto exchange Binance decided to take a U-turn on setting up shop in one of Europe’s most prominent crypto hubs, Cyprus. Binance took legal action to leave the register of crypto service providers.

Previously, the crypto titan declared its registration in Cyprus in October 2022 as a part of Binance’s Europe expansion plans. Binance now seeks to be removed from the list of crypto service providers, even though the company hasn’t started business activities after acquiring the license.

Binance has submitted an application to withdraw its registration in Cyprus ahead of the implementation of the European Union's MiCA law. Binance says it wants to focus its compliance efforts on the larger listed market in the European Union. pic.twitter.com/UHSa1CIgZn

— The Economic Largest Official (@Telo_global) June 15, 2023

Will Binance Carry on with Its European Union Plans?

The license in Cyprus would have allowed Binance to offer spot trading, crypto custody, and several other services in compliance with counter-terrorist and anti-money laundering rules.

While Binance officially takes a pro-regulation stance, legal troubles are nothing new, as already seen in Canada shutting its doors and the Netherlands implementing a whopping $3.3 million fine for ‘unregulated activity’ in April 2022. 

However, a representative of Binance assured that the exchange has no plans of leaving Europe and is instead emphasizing getting into full compliance with MiCA. The European Union’s Markets in Crypto Assets (MiCA) legislation is scheduled to go into effect next year, being the first in the world to introduce a clear and comprehensive crypto regulatory framework.

Indeed, Binance already has a visible presence in Western European countries like France, Italy, and Spain. Concentrating on these less-regulated units would significantly accelerate the preparation process of full compliance with MiCA, rather than setting up new shops, explained the spokesperson, according to Reuters.

Meet @_RichardTeng, #Binance Head of Asia, Europe, and MENA, with over three decades of financial and regulatory experience.

By working closely with policymakers, regulators, and industry players, Richard focuses on supporting our growth in a compliant and sustainable manner. pic.twitter.com/HQWFwCOO2O

— Binance (@binance) May 17, 2023

On the Flipside

• This comes just a week after Binance received a major blow from the U.S. Securities and Exchange Commission with 13 criminal charges, including personal allegations against Binance’s CEO Changpeng ‘CZ’ Zhao.
• Facing scrutiny in the United States, Binance adopted a similar approach to Coinbase, which also aims to move the bigger part of its business to the European Union, according to CEO Brian Armstrong.

Why This Matters

Cryptocurrency markets are at a crossroads after the SEC dropped two lawsuits on the two biggest global crypto platforms.

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