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Binance refused licences across Europe as troubles continue

By Nithya Bose in UK Business News, posted July 4, 2023

Binance is encountering numerous challenges in Europe as it struggles to expand its operations on the continent.

The Netherlands and Belgium have closed the crypto giant, and Germany is withholding its license to operate.

Moreover, French prosecutors are searching Binance's office as part of a money laundering investigation.

As a result, Binance's share of euro-denominated crypto trading has plummeted from over 30 percent in January to around 15 percent, according to Kaiko.

European regulators have adopted a more stringent approach toward crypto exchanges following the collapse of FTX.

This regulatory shift threatens to limit Binance's presence in Europe, potentially pushing the exchange to rely more heavily on markets in Asia, Africa, and Latin America.

Countries such as Vietnam, Turkey, India, and Argentina already generate significant user traffic on the platform, though France, Germany, and the Netherlands remain in the top 25, as reported by SimilarWeb.

Binance also faces ongoing challenges in the US, including a lawsuit from the Securities and Exchange Commission and a criminal investigation by the Department of Justice.

However, Binance focuses on complying with the requirements of the forthcoming European Union legislation, known as MiCA, which will govern digital-asset companies across its 27 member states starting next year.

Led by Changpeng Zhao, the crypto exchange has witnessed rapid growth since its establishment in 2017, capitalizing on the hesitant stance of regulators worldwide.

In response to mounting scrutiny, Binance vowed to obtain licenses and embrace regulation.

In 2022, the exchange designated Paris as its first regional headquarters, following a rigorous registration process in France.

However, its past actions continue to haunt it, with French prosecutors investigating for inadequate money laundering controls and the illegal provision of services before registration.

Binance has faced more setbacks, including being ordered by Belgium's Financial Services and Market Authority to cease operations in the country and failing to secure registration in the Dutch market.

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Approval to operate in Germany has also proven challenging, with BaFin, the markets regulator, offering crypto-custody licenses to only seven companies, including American exchange Coinbase.

The intensifying regulatory scrutiny has led some financial service providers, such as Paysafe, to distance themselves from Binance.

Paysafe recently announced the cessation of its euro transfer services for the exchange, following an earlier decision to terminate British pound services. Binance intends to find a new provider to resume the service.

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