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Binance’s crypto custody licence application has reportedly been rejected by the German BaFin regulator.
Still the largest crypto exchange in the world by trading volume, Binance is continuing to labour into strong headwinds, suffering regulatory pushback in some European countries, and of course currently being sued by the US regulator.
The latest setback for Binance was reported by the German-based Finance Fwd website. The article stated that the BaFin regulator had either officially denied a crypto custody licence application, or had verbally notified Binance that its licence had been rejected.
A spokesperson for Binance was quoted as saying:
“Even if we cannot share details of our discussions with the regulators, we will continue to work to meet Bafin's requirements. It is an ongoing process”
“We are confident that we have the right team and the appropriate measures to continue our discussions with the regulatory authorities in Germany.“
The rejection in Germany will be a difficult pill to swallow for Binance’s CEO Changpeng Zhao, better known as CZ. The ongoing defence of his company and him personally in the US is a weight around the neck of the crypto exchange.
Battlegrounds need to be won
With such a globally important regulator as the Securities and Exchange Commission (SEC) accusing CZ of embezzlement of customer funds among other allegations, obtaining regulatory licences in other countries is going to be difficult, at least until it is known how the accusations are likely to pan out.
Given that Binance is such an important exchange in the crypto ecosystem many may be hoping that it is able to resist the SEC. Both Binance and Coinbase are very important battlegrounds that need to be fought and won if the crypto industry is to reinject some momentum into the beleaguered asset class.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.