Binance May Be Forced Out of EU as License Fails

If you’re an EU-based crypto trader and you use Binance, you may need to look for a new exchange shortly.

In a blog post on Wednesday, the world’s largest cryptocurrency exchange said that it had withdrawn its application for a Greek license to operate in the EU. Those Markets in Crypto-Assets (MiCA) licenses become mandatory for exchanges to continue to do business after July 1.

“Binance is not leaving Europe,” Gillian Lynch, the company’s head of Europe and the United Kingdom, told Reuters. “We may just have a different pathway to being authorised. If it is not Greece, I’m looking at other alternatives.”

It has said it intends to pursue authorization in another member state, and will announce which one as soon as possible.

Making that happen without winding down business in the EU, at least temporarily, could prove to be a steep hill to climb. In its blog post, Binance said that it “worked for many months” with Greece’s Hellenic Capital Markets Commission (HCMC), and the same timeline would almost certainly apply in any other EU agency.

Indeed, Binance said that it is confident it will secure a MiCA license from another jurisdiction “in the coming months.”

“Some users may be impacted depending on their country and account status, and we will communicate directly with affected users on next steps and available options,” Binance said. “Europe is an important region for Binance, and our ambition to operate under a clear, fair, and harmonized MiCA framework remains unchanged.”

The European Securities and Markets Authority (ESMA) said unlicensed exchanges must “wind down activities… on July 1.”

They will only be allowed to provide services “necessary to sell or transfer crypto-assets, reallocate assets, or close positions. Custody of clients’ crypto-assets can only continue for the period strictly necessary to complete an orderly exit.”

Few exchanges are ready

The news comes as only a small number of exchanges have achieved crypto asset service provider (CASP) licenses in the EU. As of May, just 194 out of 3,000 active virtual asset service providers had qualified as MiCA CASPs, according to global law firm Hogan Lovells.

Binance’s announcement came a day after Ripple announced that it had received a preliminary CASP license from Luxembourg.

Earlier this month, crypto custody firm BitGo launched a crypto-as-a-service platform designed to help exchanges meet the European Union’s Markets in Crypto-Assets (MiCA) regulations.

BitGo CEO Mike Belshe said that instead of leaving customers high and dry during licensing delays, firms that are “still waiting on approval, or [would] rather use licensed infrastructure than build it yourself, we can help keep you moving safely and compliantly.”