The Netherlands and Belgium have barred it, Germany hasn’t issued an operating licence for it and French prosecutors are investigating it… But why isn’t Binance landing in Europe?
First things first, regulators have shifted gears this year, placing greater scrutiny on crypto exchanges’ operations following the collapse of FTX. As a result, Binance’s share of euro-denominated crypto trading has fallen to about 15% from over 30% in January.
The European setbacks follow Binance’s decision to declare Paris its first regional headquarters in May 2022 after spending more than a year and a half obtaining registration approval in France.
French prosecutors are investigating the exchange for lack of money laundering controls and the illegal offering of services before Binance received registration, according to a statement from the Paris prosecutor’s office.
Furthermore, Belgium’s Financial Services and Market Authority ordered Binance to cease offering services in the country only last month. The authorities say the exchange was doing so using companies outside the European economic area, which is forbidden. Days earlier, Binance said it was leaving the Dutch market after it failed to get a registration.
The exchange has also struggled to get approval to operate in Germany, where BaFin, the markets regulator, offers crypto-custody licences. Seven companies currently have the BaFin licence, including American crypto exchange Coinbase.
The increased regulatory scrutiny in the U.S. and elsewhere has spooked some banks and other companies providing financial services for the exchange. Last week, Paysafe, which supports euro transfers to and from Binance, said it would stop providing the service. It follows a move to stop British pound services it announced earlier this year.
Interestingly, Vietnam, Turkey, India and Argentina among other Asian and LATAM countries already draw the highest user traffic at Binance, although France, Germany and the Netherlands are in the top 25, according to May data from analytics firm SimilarWeb. These European setbacks add to Binance’s woes in the U.S., where it is battling a lawsuit from the Securities and Exchange Commission and an ongoing criminal investigation from the Department of Justice.