Binance exits Germany as BaFin denies license
Binance, the world’s largest cryptocurrency exchange, has withdrawn its application for a crypto license in Germany. This move comes as the crypto giant continues to reassess its immediate expansion plans in response to the tough regulatory stance towards the whole industry.
“Binance confirms it has proactively withdrawn its BaFin (Germany’s financial regulator) application. The situation, both in the global market and regulation, has changed significantly. Binance still intends to apply for appropriate licensing in Germany, but it is essential that our submission accurately reflects these changes,” a spokesperson for the company said.
Binance’s decision to withdraw its application for a crypto license in Germany also comes as part of a broader exit strategy from various markets, including the UK, Austria, Belgium, and the Netherlands. Additionally, the exchange’s U.S. arm is currently facing a lawsuit from regulators for operating an unregistered exchange.
German financial regulatory authority has reportedly told Binance that it will not issue a digital asset custody license to the world’s largest cryptocurrency exchange. The exact nature of this denial, whether it was a formal ruling or a communicated intention during ongoing discussions, has not been clarified.
Binance stated that it will not disclose specific details of its conversations with regulators in Germany. However, the exchange affirmed its commitment to comply with BaFin’s requirements.
Binance described the process as detailed and ongoing, emphasizing that it is confident in having the necessary team and measures in place to address the regulatory concerns and navigate the situation.
Changpeng Zhao (CZ), founder and CEO of Binance confirmed last year that they are in talks with Germany’s regulators to secure a local crypto license. The move marked the first time a major ‘unregulated’ exchange has made a move toward such a coveted licence in Europe’s largest economy.
“We hope to get a licence in Germany. Our team is definitely talking to regulators and based on secondary feedback the conversations are going well,” CZ said while speaking at the Finance FWD Conference in Hamburg.
If approved, the move would have boosted Binance’s ambitions in Europe after it has been on shaky ground last year, with regulators in the UK and elsewhere putting the exchange under intense scrutiny.
To encourage regulated business within the crypto industry, Germany adopts a licensing scheme for digital assets services after the amendment it introduced two years ago to the EU’s Money Laundering Directive.