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BaFin Strikes: Binance Denied Cryptocurrency Custody License in Germany

 


In a major setback for the world's largest cryptocurrency exchange, Binance, the German financial regulatory authority, BaFin, has reportedly rejected its license application, according to information from Finance Forward. This poses a significant challenge for Binance as licensing is essential for expansion and advertising in Germany. It appears that Binance failed to meet the regulatory requirements set by BaFin.

Jonas Jünger, the newly appointed Germany CEO of Binance, had the task of convincing BaFin to grant the license. In an initial interview, Jünger emphasized the importance of such a license for Germany as a financial hub. However, the requirements imposed by BaFin proved to be too stringent, leading to a clear rejection of Binance's application.

Binance is not only facing pressure in Germany but also in other European countries. It has already lost licenses and exited markets in the Netherlands, France, and the United Kingdom. Additionally, Binance withdrew its license application in Austria. The ongoing lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance and its founder Changpeng Zhao, known as CZ, further burdens its global operations.

Without the required cryptocurrency custody license, Binance is prohibited from advertising in Germany, limiting its growth potential. Nevertheless, Binance is already one of the largest crypto apps in Germany. Users can still access the website and app, as it is not banned. According to Wirtschaftswoche, Binance has two million customers in Germany and is one of the most recognized brands in the crypto market.

Although the rejection from BaFin is a significant setback, Binance remains committed to expanding in Europe. However, long-term growth necessitates the ability to advertise in respective markets. Binance has already obtained licenses in Sweden, Lithuania, Poland, France, Spain, and Italy, and continues to collaborate with regulatory authorities worldwide. The company is also focused on aligning its operations with the new EU regulations for crypto-assets (MiCA). MiCA, effective without restrictions from December 30, 2024, are guidelines imposed by the European Union to regulate crypto trading.

BaFin's denial of Binance's license in Germany underscores the increasing stringency of cryptocurrency market regulations. Authorities prioritize compliance and aim to minimize potential risks for investors. Such developments can impact the price movements of Bitcoin and other cryptocurrencies. Investors should closely monitor regulatory developments and be aware that negative news like this can influence the market.

Germany has had limited significance in the cryptocurrency market thus far. BaFin's decision to deny Binance a cryptocurrency custody license highlights the challenges and obstacles faced by crypto companies in Germany. The future development of regulations and Germany's position in the crypto market remain to be seen.

Location: Kreiensen, 37574 Einbeck, Deutschland

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