German regulator reportedly rejects Binance’s crypto custody license request

CoinTelegraph reported:

The German Federal Financial Supervisory Authority (BaFin) — the country’s financial regulator — has reportedly rejected Binance’s crypto custody license application.

The news was first reported by Forward Finance, citing people familiar with the matter. Cointelegraph reached out to Binance to confirm the news, and a spokesperson from the firm said that it is “unable to share details of conversations with regulators,” adding:

“We continue to work to comply with BaFin‘s requirements. As expected, this is a detailed and ongoing process. We are confident that we have the right team and measures in place to continue our discussions with regulators in Germany.”

Based on the comments from Binance and the exclusive report, it is unclear whether BaFin has officially rejected Binance’s bid to acquire the license or verbally informed the company of the same, and the exchange may withdraw the license in the near future.

The reported denial of a custody license hinders Binance’s advertising plans in Germany. As per law, only licensed firms can advertise in the country. However, Binance still remains a large trading platform with a reported 2 million customers.

Binance’s struggles with regulators continue to mount as the exchange finds itself in regulatory soup, similar to 2021 when it faced regulatory warnings from more than half a dozen countries.

Related: Don’t follow the US: Blockchain Aus CEO hammers ‘regulation by enforcement’

After its recent regulatory troubles in the United States, Binance’s CEO said its focus is on the European market and becoming compliant with the Market’s Crypto Assets (MiCA) regulations. However, just like the U.S., the crypto exchange has faced regulatory pushback in many European countries as well.

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

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