Coinspeaker
Binance Drops Crypto License Bid in Germany amid Regulatory Pressure
Binance has withdrawn its application for a crypto license in Germany, citing the changing situation in the global market and regulation. Earlier in June, reports emerged suggesting that the German Federal Financial Supervisory Authority (BaFin) declined the exchange’s license request. However, a Binance spokesperson affirmed the company was still in talks with the regulators.
Now, the exchange has confirmed proactively withdrawing its BaFin application. According to the statement, “Binance still intends to apply for appropriate licensing in Germany, but it is essential that our submission accurately reflects these changes.”
According to Wirtschaftswoche, Binance had as many as 2 million customers in Germany by February 2023. Consequently, the failure to obtain a crypto license will be a huge blow to its services, even if customers can still use the platform indirectly.
Binance Losing Crypto Licenses All Over Europe
Binance’s withdrawal of its crypto license application in Germany comes amid increasing regulatory pressure on the exchange in Europe. In recent months, Binance has faced scrutiny from several regulators and authorities. The country recently withdrew from Austria, Belgium, and the Netherlands after failing to secure appropriate crypto licenses. The crypto exchange has also shuttled its operations in the United Kingdom and Cyprus.
Outside of Europe, Binance is not faring any better. The SEC had accused Binance of inflating its crypto trading volumes and engaging in illegal practices. The regulator also filed a lawsuit against the company and its CEO for allegedly operating unregistered securities exchanges. It also withdrew from the Canadian market.
Where Binance seems to still be enjoying some respite is in the Asia-Pacific and the Middle East. Binance CEO Changpeng Zhao recently announced the imminent launch of the exchange in Japan. The exchange also obtained an operational license in Thailand. Its operating licenses in New Zealand, Indonesia, Australia, Bahrain, and Dubai are also intact.
Will Binance Maintain Its Market Share?
As of now, Binance retains the majority of the crypto market share despite the regulatory challenges. While it is down from 61% in February, Binance continues to control 52% of the market, according to Kaiko. However, Binance may not maintain its position in the market if it loses more of its crypto licenses or is asked to withdraw elsewhere.
As a market leader, Binance must learn how to balance innovation and growth with its compliance with regulations. In line with this, the exchange has said it has plans to fully comply with the European Union’s Markets in Crypto Assets (MiCA) legislation once it is implemented in 2024.
Binance Drops Crypto License Bid in Germany amid Regulatory Pressure
