The latest news is about Binance and its decision to withdraw its application for a crypto custody operator’s license in Germany, motivated by a desire to focus on the broader goal of MiCA compliance.
After last month’s rejection by German regulator BaFin, Binance closes this chapter by downsizing its presence in the European territory, where it has now also abandoned the markets of Austria, Belgium, the Netherlands and Cyprus.
Let’s look at the details of the news together
Crypto news: Binance exits German market pending entry into force of MiCA
All of the news in recent hours mention Binance’s U-turn in its attempt to obtain a crypto services operator license in Germany, awaiting the final entry into force of the European MiCA (Market in Crypto Assets) regulatory framework.
The world’s largest cryptocurrency exchange in terms of transacted volumes has thus withdrawn its application to the German government agency BaFin, after the latter closed the doors in its face last month by denying it a license.
The reasons for the decision appear to be related to overly stringent regulations that make registration practices complex, considering also that in about 12 months the entry of MiCA will allow crypto providers to operate throughout the entire Union if certain compromises are met.
Despite this, a spokesperson for the exchange said:
“Binance still intends to apply for appropriate licensing in Germany.”
noting that the revised submission would reflect significant changes in the global market and regulation.
Hence, Binance may soon try again with a new application to the German regulator, but this is at least partly unnecessary at such a historical moment.
Indeed, the company has not been forced to completely abandon the German market, where it can continue to operate as usual without being able to carry out propaganda or advertising campaigns.
In Germany, the exchange can still count about 2 million customers with an influx of another 12,000 subscribers each week.
A license to actively procure new customers is perhaps not necessary at this time.
What matters most is to be ready for MiCA, which will open its doors to the whole of Europe giving new stimuli, challenges and opportunities to all crypto trading providers.
Binance scales back its crypto presence in Europe as it awaits MiCA
The latest crypto news that sees Binance announce its withdrawal for a license in Germany ahead of MiCA follows other downsizing in the European territory.
In fact, while the Market in Crypto Assets will be the new shared standard for all EU states when it comes to cryptocurrency regulation, at the moment the exchange has had to settle for a fragmented presence on the continent.
Indeed, as early as last month, Binance announced that it had embarked on a decision to exit the Netherlands’ financial environment.
Unlike Germany, where trading and all operations remain open as usual, in the Netherlands current customers can only withdraw their assets from the platform without the ability to conduct purchases, trades, or deposits.
In addition, the exchange recently withdrew its application for regulatory approval in Cyprus in addition to being halted by Belgian authorities for violating national anti-money laundering and terrorist financing laws.
Also joining the crypto platform blacklist is Austria, where a VASP license was not obtained to operate legally in the country.
According to Finance Forward reports, the difficulties encountered on the European continent for Binance and the failure in registration goals with various government authorities has led to a turnover of 12 executives from the company.
Prominent among them is Michael Wild, who previously worked for Israeli broker eToro in charge of developing business solutions in Germany, Austria and Switzerland.
At the moment, Binance can continue to boast a strong presence in France, Spain and Italy, Poland, Sweden and Lithuania, where all documents have been obtained as a service provider for virtual assets.
In France, the exchange obtained approval from the regulator AMF about a year ago and opened its European headquarters, away from its main holding in the Cayman Islands.
While MiCA waits for all participants in the Union to comply with directives signed by the European Parliament in April 2023, Binance just has to hope that it will not face further squabbles with authorities and continue undisturbed with its expansion into non-European territories.
More problems with US regulators
The problems for Binance do not seem to be confined within the European context: as it prepares for MiCA, the crypto exchange has also faced several attacks from US federal regulators, among which the SEC and CFTC stand out.
Specifically, in June the Securities and Exchange Commission had charged Binance Holdings Ltd., its US affiliate BAM Trading Services Inc. and their founder, Changpeng Zhao, with “a variety of securities law violations.“
In detail, Gary Gensler and his team had filed 13 different charges with the US Federal District of Columbia, with the intent to hinder the development of the crypto industry in the US.
During the same period, other exchanges such as Coinbase were also targeted by the US regulator, which was dealt a blow with Ripple’s recent court victory in a case that had been going on for years.
In addition to the SEC’s slander, from which a vigorous defense in court seems at least feasible, Binance also faced an issue with the Commodities Futures Trading Commission.
The latter reportedly sued the exchange for alleged circumvention of derivatives and securities rules, with Changpeng Zhao and his team responding by filing a motion to dismiss the lawsuit.
There is still no single document approved in the US like the MiCA in Europe, hence while Binance has not encountered the same registration difficulties, it must comply with a variety of local laws, trying to comply with all of them while maintaining a solid corporate structure.
There are many challenges for the cryptocurrency giant, but it could turn recent European failures and US charges into opportunities to demonstrate even more of its strength and resilience, paving the way for a successful future on a global scale.
