BaFin, the regulatory authority responsible for overseeing financial institutions in Germany, has reportedly communicated its decision to deny Binance a crypto custody license. While the exact nature of the denial—whether it is a formal decision or an expression of intention during ongoing discussions—remains uncertain, local publication Finance Forward reported on the matter based on information from anonymous sources.
Binance has neither confirmed nor denied the report, stating that it cannot disclose the details of its conversations with regulators. However, the exchange emphasises its commitment to meeting BaFin’s requirements and continuing the dialogue.
BaFin, on the other hand, refrains from commenting on individual companies, according to a spokesperson cited by Finance Forward. Decrypt reached out to BaFin for a separate comment but has not received an immediate response.
Since 2020, crypto custody providers and exchanges operating in Germany and targeting local users have been required to obtain a BaFin license. Coinbase Germany became the first entity to secure such a license in June 2021.
Binance, with an estimated 2 million users in Germany as of February 2023, as reported by Wirtschaftswoche, is one of the largest cryptocurrency platforms in the country. Despite the lack of a license, users can technically still access and utilise the exchange. However, if the denial of the license is confirmed, it would undoubtedly be a setback for Binance, especially considering the recent withdrawal of support from its European banking partner, Paysafe Payment Solutions.
Nonetheless, Binance asserts its commitment to collaborative engagement with regulators worldwide and emphasises its focus on aligning with the new European Union regulations on crypto-assets (MiCA). The exchange is determined to ensure its business is fully compliant with the evolving regulatory landscape.
As the situation unfolds, the implications for Binance’s operations in Germany and its relationship with BaFin will be closely watched by industry observers and cryptocurrency enthusiasts alike.
