German Regulator Denies Binance’s Request For Crypto Custody License

Binance experienced yet another setback in pursuing a crypto custody license in Germany. The company’s application, submitted to BaFin, the country’s financial watchdog, was ultimately rejected.

It is currently unclear whether the rejection was a formal decision from BaFin or simply an indication expressed during ongoing discussions.

The crypto exchange confirmed the news stating:
We continue to work to comply with BaFin‘s requirements. 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.

Due to Germany’s professional secrecy requirements, BaFin is unable to provide detailed comments on individual businesses, including Binance. However, recent reports suggest that Binance has faced challenges in several European countries.

Binance Faces Growing Challenges In Europe
This week, Binance, the largest cryptocurrency exchange globally, made a series of significant moves in Europe. It withdrew its application for an operating license in Austria and halted its registration process in Cyprus.

Additionally, the company decided to exit the Dutch market after an unsuccessful attempt to obtain a permit. Recent reports from France have indicated that the exchange is currently under investigation for potential involvement in money laundering activities within the country.

The exchange was also ordered to cease its operations in Belgium. Furthermore, Binance is currently facing allegations from the United States securities regulator for allegedly operating an unregistered trading platform.

The exchange has announced plans to streamline its European strategy in anticipation of the forthcoming crypto regulation in the EU. This new regulation will enable cryptocurrency firms to operate across a single market by obtaining regulatory approval in any of those markets.

Following its recent regulatory challenges in the United States, Binance’s CEO Changpeng Zhao expressed a renewed focus on the European market and ensuring compliance with the Market’s Crypto Assets (MiCA) regulations.

The recent challenges faced by Binance highlight the growing scrutiny placed on cryptocurrency exchanges worldwide.

Binance To Lose Euro Banking Partner’s Support
In another setback for the crypto exchange, its European banking partner, Paysafe, has decided to discontinue support for euro-denominated bank transfers to and from the crypto platform.

This means that Binance will lose access to this particular service provided by Paysafe. The termination of this partnership further contributes to the challenges and limitations faced by Binance in its European operations.

Paysafe mentioned:
Following a strategic review, we have taken the decision to cease offering our embedded wallet solution to Binance across the region.

Despite the discontinuation of euro-denominated bank transfers by Paysafe, Binance has stated its intention to find an alternative provider.

The exchange has assured users that deposits, withdrawals, and trading of other fiat currencies on its platform, as well as the trading of cryptocurrencies, will continue without interruption. It is also actively seeking a new solution to facilitate euro transactions and maintain seamless operations for its users.

Bitcoin was priced at $30,600 on the one-day chart | Source: BTCUSD on TradingView.com Featured image from CNBC, chart from TradingView.com