The world’s largest crypto exchange Binance is facing increasingly harsh regulatory headwinds in Europe. Bafin’s rejection of a license application is just the icing on the cake. In contrast, the exchange is finding an attractive alternative in the United Arab Emirates.
According to Finance Forward magazine, German financial regulator Bafin has denied the world’s largest crypto exchange Binance a license for the German market. However, neither Bafin nor Binance have issued an official statement on the matter. Only from the side of the exchange it is said that they continue to work to meet the requirements.
If Binance does not receive a license for crypto services on the German market, it does not mean that the company is not allowed to serve German clients. However, the exchange will be able to expand less aggressively and, for example, will not be able to run advertisements targeting German customers.Presumably, it will also likely make it more difficult to cooperate with German banks and payment service providers.
For Binance, Bafin’s rejection is just another setback in the European market. In the UK and Austria, Binance withdrew a license application; in the Netherlands and presumably Belgium, the exchange is shutting down operations because it won’t get a license; and in France, the Paris prosecutor’s office is investigating Binance on suspicion of money laundering. All this in May and June. It’s going to be tight for the exchange.
Possibly Binance, like many crypto service providers, is hoping that when EU-wide regulation comes into effect, the patchwork in Europe will be unified and some regulators will be forced to license Binance in defiance of national rules. Conversely, however, it is conceivable that Binance will lose the few locations where the exchange holds a license in the EU, such as Spain, Italy or France, as a result of EU regulation.
The United Arab Emirates (UAE), with its financial center Dubai, is increasingly becoming an alternative for Binance. It’s becoming apparent, the exchange’s Dubai manager Alex Chehade tells Cointelegraph, “that the leadership in the Emirates wants to make the region the center of Web3. They are trying to make themselves less dependent on oil and see crypto as a means to that end.”
Regulation in the UAE is straightforward, and Binance has been assured it can continue to operate there on the same terms in the future. The growing interest in crypto in the region is also being driven by many expats from Europe and Asia, he said. Especially in the wake of the Ukraine war, many Russians and Ukrainians fled to Dubai.
For EU countries, this once again boils down to the formula that too strict regulation yields less control, not more. Companies that can afford it will not submit to overly stringent regulatory requirements, but will look for new locations. Whether this strengthens or weakens the competitiveness of local companies that are loyal to regulation depends on whether service bans, such as those apparently in place in Belgium and the Netherlands, can be enforced.
Picture Copyright: neiezhmakov
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