Global: Binance’s Application for Crypto Custody License Rejected by German Regulator

Binance, the popular cryptocurrency exchange, faces further regulatory challenges as it encounters pushback from authorities in Europe and the United States.

Reports indicate that the German Federal Financial Supervisory Authority (BaFin), the country’s financial regulator, has rejected Binance’s application for a crypto custody license. Forward Finance was the first to report this news, citing sources familiar with the matter. When contacted for confirmation, a Binance spokesperson stated that they are unable to provide details of their discussions with regulators but affirmed their commitment to comply with BaFin’s requirements. The spokesperson also expressed confidence in their team’s ability to continue engaging with German regulators.

It remains unclear whether BaFin formally rejected Binance’s license application or conveyed the decision verbally. However, it is possible that Binance may withdraw the application in the near future. This reported denial of a custody license poses obstacles to Binance’s advertising plans in Germany since only licensed firms are allowed to advertise in the country. Nevertheless, Binance remains a significant trading platform with an estimated 2 million customers.

Binance’s struggles with regulators have been escalating, reminiscent of the challenges it faced in 2021 when multiple countries issued regulatory warnings against the exchange. Despite expressing a focus on the European market and striving for compliance with the Market’s Crypto Assets (MiCA) regulations, Binance has encountered regulatory resistance in several European countries, similar to its experiences in the United States.

Recently, it came to light that the exchange has been under investigation in France since early 2022 on charges of “aggravated money laundering.” Binance also withdrew from the Dutch market after failing to obtain a virtual asset service provider license from regulators in the country. Additionally, the exchange has applied to wind down its services in the United Kingdom and Cyprus.