According to a Financial Times report, Binance is exiting the European Union (EU) after failing to gain a Markets in Crypto-Assets (MiCA) license. The world’s largest exchange will cease operations in the EU from next week onwards.
Will Binance Re-Enter After Exiting EU?
Binance applied for a EU-wide license in Greece, but the application was rejected last week. The exchange said that it did not receive any formal decision from the Greek authorities, and decided to withdraw its application and reapply from another member state. People close to the matter, however, say that the application was rejected due to concerns about money laundering controls and whether Zhao passed the “fit and proper” test.
Binance now plans to apply for a license in France. However, the EU has set July 1 as the deadline for enforcing the MiCA regulations. All service providers are required to have a MiCA license from July 1 onwards. Even if Binance’s license is approved via France, it will likely happen after July 1. The exchange will not be permitted to offer its services within the EU in the meantime.
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Binance currently has local licenses in Poland, Italy, Spain and France. However, it still needs to seize operations due to not having a MiCA license. The exchange sent emails to its clients from these countries telling them how to withdraw their funds from the exchange.
Binance stated, “Europe remains an important market for Binance, and our commitment to a clear, fair and harmonized MiCA framework is unchanged. We are confident we will secure a MiCA license in the coming months and will announce the relevant member state when ready.“
An EU exit could be disastrous for Binance. Clients may move to other rival exchanges while Binance waits for a MiCA license.