According to a local report, Binance has been denied a crypto custody licence by Germany’s financial watchdog, the Federal Financial Supervisory Authority (BaFin).
Earlier this year, Binance underwent a change in leadership in Germany, with Jonas Jünger taking over and prioritizing the acquisition of a crypto custody licence from BaFin. However, insider sources reportedly revealed that the regulatory requirements proved excessively burdensome for Binance, thus leading to the rejection of the licence application.
The exact details of BaFin’s response to Binance’s licence application remain unclear. It is also uncertain whether the rejection was conveyed verbally or through a formal written notification.
Meanwhile, this rejection of the custody licence poses a setback to Binance’s plans for advertising in Germany, as only licensed companies are permitted to engage in advertising activities within the country. Nevertheless, Binance continues to maintain a strong presence in the trading market, boasting an estimated user base of 2 million.
Binance is currently facing escalating regulatory challenges similar to those it encountered in 2021. Numerous European countries, including the Netherlands, France, and Great Britain, are intensifying their scrutiny of cryptocurrency exchanges.
Binance, though a major player in the industry, has been forced to exit these markets due to regulatory issues. A French publication, Le Monde, reported that Binance has been under investigation for “aggravated money laundering” in France since the beginning of 2022. Additionally, after failing to secure a virtual asset service provider licence from Dutch regulators, the exchange has recently exited the Dutch market.
Moreover, corporate partners such as European banking partner Paysafe have distanced themselves from the company. These developments underscore the ongoing regulatory hurdles faced by Binance in Europe.
Binance’s regulatory challenges extend beyond Europe as well. In Brazil, Guilherme Haddad, the exchange’s managing director, was summoned to appear before the Brazilian Parliament as part of an investigation into an alleged pyramid scheme involving the company.
Furthermore, the recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance and its founder, Changpeng Zhao (CZ), has significant implications and is expected to further complicate matters on a global scale.
In response to the regulatory challenges in the United States, CZ has expressed a renewed focus on the European market and ensuring compliance with the Market’s Crypto Assets (MiCA) laws. However, it is important to note that several European countries have also displayed resistance to regulating cryptocurrency exchanges, a stance similar to that of the United States.
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