Despite reports that BaFin has denied Binance’s crypto custody license application, the company remains committed to working with regulators.
Whether the rejection was merely an intention statement or a formal decision was unclear.
Regulation of Binance is proving difficult for both European and American regulators.
Binance was reportedly informed by BaFin, a German financial regulatory authority, that it would not be able to obtain a crypto custody license from the authority.
Finance Forward published an article on Thursday about the development, according to people familiar with the matter. However, the BaFin statement noted no clarity on whether the denial was formal or an intention expressed in ongoing discussions.
Binance has yet to confirm or deny the report. However, the exchange continues to comply with BaFin’s requirements despite being unable to disclose details of conversations with regulators.
A detailed and time-consuming process is likely to result. The team and measures we have in place are right as we continue our discussions with German regulators.
Defining individual companies is not Bafin’s policy, a spokesman told Finance Forward. When Decrypt requested a separate comment from BaFin, it didn’t hear back immediately.
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The German crypto license policy
Custody providers and crypto exchanges need a BaFin license starting in 2020 to operate in Germany. The products and services they provide must also be advertised to local customers.
The first crypto custody platform license was awarded to Coinbase Germany in June 2021 by BaFin.
Binance was one of the largest exchanges in Germany, with 2 million users in February 2023, according to Wirtschaftswoche. Furthermore, despite not having a license in Germany, Binance is still accessible and usable by German users.
If confirmed, Binance would still suffer a blow if denied a license. Earlier today, Binance announced that it had withdrawn its support from Paysafe Payment Solutions.
Binance said, “We will continue to work collaboratively with regulators globally.”