Germany’s financial regulator, BaFin, has reportedly denied Binance’s application for a custody license. The denial, as reported by FinanceFWD, remains unconfirmed whether it is a formal decision or an intention to deny, according to sources familiar with the matter.
Binance, one of the world’s largest cryptocurrency exchanges, acknowledged the situation and stated its commitment to meeting BaFin’s requirements. Although the exchange couldn’t provide specific details about its conversations with regulators, it expressed confidence in its team and measures in place to continue discussions with German authorities.
Additionally, Binance announced that Paysafe, its banking partner for euro deposits and withdrawals, will no longer support the exchange starting from September. This decision by Paysafe follows a strategic review and will affect euro-denominated bank transfers to and from Binance through the Single Euro Payments Area (SEPA) network. It should be noted that Paysafe had already ceased GBP support for Binance back in May.
Binance assured its customers that no other fiat currencies, products, or services on Binance.com would be affected by this change. The spokesperson emphasized that users could still deposit and withdraw other fiat currencies, make crypto transactions, and utilize credit or debit cards for buying and selling cryptocurrencies on the platform.
Starting from September 25, Binance users will need to update their banking details used for deposits, and they may also be required to accept new terms and conditions to continue utilizing SEPA services. These changes are a result of Binance’s search for a new provider for EUR deposits and withdrawals via Bank Transfer (SEPA).
The regulatory challenges faced by Binance in Europe are seemingly linked to the mounting pressure the exchange is under in the United States. Binance and its CEO Changpeng Zhao are currently facing a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), alleging violations of U.S. securities laws, specifically related to unregistered securities offerings and commingling of customer funds.
Apart from the issues in the United States, Binance has faced regulatory obstacles in various European countries. The exchange recently withdrew its license application in Austria, exited the Netherlands after failing to obtain regulatory approval, and deregistered its non-operational entity in the United Kingdom. Furthermore, Belgium’s financial regulator ordered Binance to cease services in the country, while France is reportedly investigating the exchange for alleged money laundering activities.
Despite these challenges, Binance remains committed to collaborating with regulators worldwide and is actively working towards ensuring compliance with the new European Union rules on crypto-assets (MiCA).
In a similar vein, Coinbase, another major cryptocurrency exchange, is also facing a lawsuit from the SEC in the United States. The legal action against both Binance and Coinbase underscores the growing scrutiny and regulatory efforts aimed at the crypto industry.
As the situation unfolds, the future trajectory of Binance and other cryptocurrency exchanges will depend on their ability to navigate and address the regulatory concerns raised by authorities in different jurisdictions.
