Binance says it has no plans to leave Europe, even as the world’s largest cryptocurrency exchange races against time to secure authorization under the European Union’s new crypto licensing regime.
Speaking to Reuters on Wednesday, Binance’s head of Europe and the United Kingdom, Gillian Lynch, pushed back against suggestions that the company could be forced out of the bloc after its attempt to obtain a license in Greece failed.
“Binance is not leaving Europe,” Lynch said. “We may just have a different pathway to being authorised. If it is not Greece, I’m looking at other alternatives.”
The comments come at a critical moment for the exchange. Binance reportedly has just days to secure approval under the EU’s Markets in Crypto-Assets (MiCA) framework before its current permission to operate across Europe expires.
Without a license, the company could face the prospect of scaling back or winding down services for millions of European users.
Binance’s regulatory problems come at a time when executives in the industry have cautioned that the crypto regulation in the EU could mean the demise of many exchanges within the jurisdiction.
In a previous statement, OKX Europe Chief Executive Officer, Erald Ghoos noted that the Markets in Crypto Assets (MiCA) could see up to 80 percent of crypto exchanges cease operations due to a lack of necessary resources to comply with the regulations.
MiCA license would allow Binance to operate across the entire EU
MiCA, which is currently being introduced as the key framework for regulating cryptocurrencies in the EU, imposes an obligation on crypto firms to get authorized by national authorities prior to providing crypto services in the entire union. If the firm gets authorized in one country, it can passport its services in the entire EU territory.
It turns out that for Binance, getting such authorization was much more difficult than anticipated.
As explained by insiders, the company approached regulators in Greece, Ireland, and Latvia as it tried to find ways to be licensed. However, it seems that Binance faced obstacles everywhere.
According to the sources, regulators were wary of Binance’s history of regulatory problems, including sanctions imposed due to money laundering issues and the company’s complicated corporate structure.
This attitude can be regarded as the manifestation of the global troubles Binance faced in the recent years due to growing interest of regulators in the crypto industry.
Still, Lynch stated that Binance made great efforts in improving its compliance and governance practices. She noted that the company now employs around 1,500 compliance professionals and argued that it has significantly improved its internal controls.
According to Lynch, Binance was surprised by the outcome in Greece and had previously believed the country’s regulator was moving toward granting approval.
She also clarified that while Binance had discussions with several regulators, Greece was the only country where it formally submitted a license application.
Binance’s licensing struggle becomes early test of EU crypto rules
The uncertainty surrounding Binance’s European future is being closely watched across the crypto industry because it represents one of the first major tests of MiCA’s enforcement powers.
The framework was intended to establish a single regulatory environment for firms providing services on digital assets in Europe. Nevertheless, there arises the issue of how strict the regulator will be in applying these rules in case the largest firm of the industry cannot get authorization.
Binance can become a landmark event for Europe’s new crypto regulation if it fails to receive a license before the deadline.
On the other hand, the exchange seems to strive to get approval rather than leave Europe.
Currently, the exchange operates in Europe and says that it is looking for an alternative way of getting authorization. Whether the regulator is ready to provide this approval is one of the most discussed issues in the crypto market of Europe.
The days ahead may show whether Binance gets into the new European regulatory environment or faces its major trial in the most important crypto market of the world.
