Binance’s Future In Germany Uncertain As Regulator Rejects License Application
- Binance reportedly denied crypto custody license by BaFin, the German financial regulatory authority.]
- The nature of the denial remains unclear, whether formal or expressed during ongoing discussions.
- Binance has neither confirmed nor denied the report, but affirms commitment to meet BaFin’s requirements.
According to reports, Binance, the cryptocurrency exchange, has allegedly received communication from BaFin, the financial regulatory authority in Germany, stating that it will not be issuing a crypto custody license to the exchange. BaFin is entrusted with the responsibility of supervising banks, financial services providers, insurance companies, and securities exchanges in Germany.
On Thursday, a local publication called Finance Forward reported on this matter, citing individuals who are familiar with the situation. However, the article mentioned that the exact nature of the denial is unclear, as it is uncertain whether BaFin’s decision was a formal one or simply an expressed intention during ongoing discussions.
Binance has neither confirmed nor denied the report, stating that it is unable to disclose specific details of its conversations with regulators. However, the exchange affirmed its commitment to fulfilling BaFin’s requirements and stated that it is actively working towards meeting them.
According to a spokesperson for Binance,
As expected, this is a detailed and ongoing process. We are confident that we have the right team and measures in place to continue our discussions with regulators in Germany.
binance rep
When approached for comment, a spokesperson for BaFin informed Finance Forward that the authority does not provide specific comments on individual companies. Decrypt, on the other hand, did not receive an immediate response after requesting a separate comment from BaFin.
Since 2020, it has been mandatory for custody providers and cryptocurrency exchanges to obtain a BaFin license if they wish to operate in Germany and promote their offerings to local users.
In June 2021, Coinbase Germany became the first entity to successfully obtain a BaFin license for operating a cryptocurrency custody platform.
As per Wirtschaftswoche, as of February 2023, Binance had approximately 2 million users in Germany, establishing itself as one of the largest cryptocurrency platforms in the country. Despite not having a license in Germany, users are technically able to access and utilize the exchange’s services.
If the denial of a license is indeed confirmed, it would be a significant setback for Binance. Additionally, Binance recently confirmed that its European banking partner, Paysafe Payment Solutions, plans to discontinue its support for the exchange. Nevertheless, Binance stated that it remains dedicated to fostering cooperative relationships with regulators worldwide.
Posted Date: July 8, 2023
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