German regulator denies Binance’s application for cryptocurrency custody license

Binance, one of the world’s largest cryptocurrency exchanges, has allegedly been denied a crypto custody license by the German Federal Financial Supervisory Authority (BaFin), according to sources familiar with the matter cited by Forward Finance.

When approached for comment, a Binance spokesperson stated that they are unable to provide details of their conversations with regulators but affirmed their commitment to complying with BaFin’s requirements. They expressed confidence in their team and measures, emphasizing ongoing discussions with German regulators.

It remains unclear whether BaFin officially rejected Binance’s license application or conveyed the decision verbally, potentially leading the exchange to withdraw its application in the near future.

The reported denial of the custody license presents a hurdle for Binance’s advertising plans in Germany, as only licensed entities are permitted to advertise in the country. Nonetheless, Binance continues to operate as a major trading platform, serving approximately 2 million customers.

Binance has been grappling with regulatory challenges globally, echoing the difficulties it faced in 2021 when it received warnings from multiple countries’ regulatory bodies. Following recent regulatory issues in the United States, Binance has shifted its focus to the European market, aiming to comply with the Market’s Crypto Assets (MiCA) regulations. However, similar to the US, the exchange has encountered regulatory pushback across various European nations.

A recent report revealed that Binance has been under investigation in France since early 2022 on charges of “aggravated money laundering.” The exchange recently exited the Dutch market after failing to obtain a virtual asset service provider license from Dutch regulators. Binance has also initiated the process of winding down its services in the United Kingdom and Cyprus.

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