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German financial regulator, BaFin, rejected Binance’s request for a crypto custody license, which is crucial for the company’s expansion and advertising in Germany, reported Finance FWD, a German crypto publication.
Jonas Jünger, who took over as the head of Binance in Germany a few months ago, had a primary mandate to secure a license from BaFin, Germany’s financial regulator. However, according to insiders, BaFin has decided not to grant the exchange a crypto custody license, a decision that Binance has reportedly been made aware of.
Binance, while not sharing specific details of its discussions with regulators, confirmed that they are actively working to meet BaFin’s requirements. Despite the setback, the company remains confident in its team and measures to continue its dialogue with German regulators:
“We are confident that we have the right team and measures in place to continue our discussions with regulators in Germany.”
It’s not known whether the regulator has formally rejected Binance’s application or has informally communicated its decision, potentially leading to Binance withdrawing the application. However, a Binance spokesperson told Finance FWD that “while we cannot share details of our discussions with regulators, we continue to work to meet Bafin’s requirements.”
This development is the latest in a series of regulatory hurdles for Binance. The company faced regulatory issues in several EU countries, such as Belgium, Cyprus and the Netherlands, while also terminating its partnership with its euro payment platform. To top that off, the exchange has recently been sued by the Securities and Exchange Commission in the United States.
In response to these challenges, Binance’s CEO Changpeng “CZ” Zhao has stated that the company is focusing on the European market and is working toward compliance with the Market’s Crypto Assets (MiCA) regulations:
Important dates for the industry coming up, MiCA has now been published in the official journal of the EU: https://t.co/in3qlQO3wV
This means crypto businesses now have firm timelines to implement and be compliant with MiCA’s requirements. Stablecoin rules apply from June 30,… https://t.co/qQtZbxZWqV
— CZ 🔶 Binance (@cz_binance) June 9, 2023
With over 2 million German customers, Binance reigns as the top exchange in Germany. However, this reported denial could affect Binance’s particularly its advertising efforts, as German law permits only licensed firms to advertise, according to Finance FWD.
