By Michael Scott
Binance suffered a major blow in its quest for an expanded European footprint. The largest crypto exchange by transaction volume is exiting the Netherlands market after failing to secure a license from the Dutch regulator. The decision to leave the Netherlands is driven by the unsuccessful process of securing the virtual asset service provider (VASP) license.
Binance Noncompliant With Anti-money Laundering Regulations
The firm, led by the Canadian national Changpeng Zhao, failed to convince the Dutch regulator that it satisfied all guidelines to obtain the VASP license. In particular, Binance could not demonstrate its compliance with the anti-money laundering regulations.
The statement conveyed by Binance via its official blog issued a July 17 deadline for the Dutch clients. Beyond the month-window deadline, the platform will restrict the residents’ access to withdraw services.
Binance decried the denial of the VASP license, marking the firm’s exit from the market. The statement clarified that it was immediately locking out new users hailing from the Netherlands. Besides halting new registration of Netherlands residents, existing users would only purchase and deposit till July 17.
Beyond the July 17 deadline, all Dutch residents will only withdraw assets from their accounts. Consequently, the platform will halt all trades and purchases to all Dutch residents.
Binance acknowledged the receptive nature of various jurisdictions in Europe to crypto exchanges. It restated its efforts to comply with the anti-money laundering efforts. It illustrated compliance with France, Spain, Poland, and Italy. Besides, its operations are AML compliant with Lithuania and Sweden.
The decision to exit the Netherlands comes 48 hours after Binance confirmed plans to exit Cyprus. The crypto exchange attributed the exit is informed by the need to comply with the newly-approved European rules, fully dabbed Market in Crypto Assets (MiCA).
Binance Denied VASP License by Dutch Regulator
Binance reiterated its pursuit of license application as a VASP with the Dutch regulator. The statement emphasized that Binance deployed a comprehensive registration process that explored alternative avenues to serve the Dutch residents without contravening the country’s regulations. The Friday, June 16 statement portrayed a disheartening feeling as the Dutch regulator denied Binance the VASP registration.
Binance restated that it would still contact the Dutch regulators in an engagement seeking reentry into the Netherlands market. Meanwhile, the statement indicated that it is dispatching emails to the Dutch residents. The email captures a comprehensive update on the accounts and assets status with clear procedures the residents should undertake.
Cyprus Deregistration Unavoidable to Pursue Larger European Businesses
Binance confirmed plans to deregister as a crypto-asset service provider in Cyprus. plans to deregister as a crypto-asset service provider in Cyprus. In a Wednesday, June 14 communication, the crypto exchange revealed the plans that exiting Cyprus would allow Binance to pursue larger European businesses.
The statement did not reveal when Binance sought to deregister. The move is a shocker considering it announced successful registration and license approval by the Cyprus Securities and Exchange Commission in late 2022.
Binance had on its website indicated that the Cyprus license allowed the crypto exchange to offer custodial and spot trading services. The regulator obligated Binance to comply strictly with counter-terrorist financing and antimony laundering. Binance acknowledged the obligation to prevent it from becoming a conduit of illicit financing.
Cyprus Exit Informed by Pursuit of Compliance With MiCA in Mature Markets
The Binance executive explains the pullback from Cyprus is unavoidable since it will sharpen the regional executives’ focus on other European Union markets before the rollout of the Markets in Crypto Assets (MiCA) regulation.
Binance executive explained that Binance would devote itself to aligning the business to fully comply with the MiCA provisions, whose enforcement is scheduled in 18 months. The Binance official added that Cyprus exit would reinforce its efforts within the larger registered markets where it commands a mature footprint.
Besides devoting efforts to operations in France, Spain, and Italy, the spokesperson affirmed the pursuit of running a compliant crypto business guided by European Union laws.
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