The world’s largest crypto exchange by volume trading, Binance, suffered another setback after the SEC lawsuit. The exchange said it was forced to exit the Netherlands after failing to convince the Dutch regulator to issue a Virtual Asset Service Provider (VASP) license.
“We regret to announce that Binance is leaving the Dutch market as we have been unable to register as a VASP with the Dutch regulator.”
The exchange did not disclose the reason for failing to obtain a license from the regulatory authorities.
The company will no longer accept new clients from the Netherlands, per the statement. From July 17 onwards, old Dutch resident users can pull their assets from the Binance platform. Additionally, no further deposits, purchases, or trades can be made.
The company claims to have explored different ways to serve Dutch residents based on local regulations. However, none of these methods provided a way for VASP registration.
Meanwhile, the exchange said it would continue its efforts to achieve a license in the region.
We regret to announce that Binance is leaving the Dutch market as we have been unable to register as a VASP with the Dutch regulator.
We continue to be committed to working collaboratively with regulators around the world and are additionally focused on getting our business…
— Binance (@binance) June 16, 2023
The crypto platform is emailing its Dutch users full details on the next steps they must take with their Binance accounts.
Under the current regulatory regime, Binance can only get permission to continue its services in an EU country by registering under anti-money laundering regulations. Meanwhile, the firm has received such authorization in Lithuania, Sweden, France, Italy, and Poland, Spain.
Binance Is In Trouble
The bankruptcy of the FTX exchange has initiated an industry-wide crisis. Federal regulators have targeted a wide swath of crypto over the past year and are tightening their oversight.
In the first week of June, the SEC sued Binance and its CEO, Changpeng Zhao, and related entities such as Binance US. The financial regulator accused the crypto group of mismanaging users’ assets, acting as an unregistered broker, artificially inflating the site’s trading volume, and more. As a result, Binance US banned users from trading on its platform using US dollars.
A few days ago, the company announced its plans to exit Cyprus to focus on full compliance with new EU rules on crypto-assets (MiCA). MiCA aims to standardize crypto regulations and keep bad actors from harming consumers, especially after the FTX shock in November.
On June 14, the Cyprus financial regulator placed Binance under investigation following a request to delist it from Cyprus’ Register of Crypto Asset Service Providers. It is currently unknown why the exchange filed the deregistration request.