Germany has rejected Binance’s license application to run in the European country. Although the crypto exchange has 2 million customers in Germany, BaFin, Germany’s Federal Financial Supervisory Authority, refused to approve the application.
Binance has been facing setbacks since the beginning of the year. The US SEC sued the exchange as well as its CEO, CZ, for offering crypto products that were not appropriately registered in the country. It has also withdrawn licenses from countries including Austria.
Although the license approval was rejected, German users are not hindered from using the Binance app. The caveat is that Binance cannot advertise its products within the country.
Germany is one of the most crypto-receptive countries in Europe. Between Q4 of 2021 and Q4 of 2022, the number of crypto users in the nation increased by over 1 million.
BaFin has embraced blockchain technology and crypto assets with a progressive approach. They have established frameworks aimed at promoting the adoption of cryptocurrencies, which include making amendments to the German Banking Act.
Jonas Jiinger, the Managing Director of Binance Germany, resumed his role in the firm before the license application was accepted. He said that the requirements of the regulatory body are high for the exchange to meet, which has also halted its expansion in Europe.
Binance in response to the disapproval, said that they are still working with the regulators to make sure the exchange is licensed. “While we cannot share details of our discussions with regulators, we are continuing to work to meet Bafin’s requirements.”
It added that it will also continue to work in accordance with the new MiCA rule initiated by the European Commission for all digital asset providers in Europe.
Apart from Binance, BaFin has also noted the presence of CakeDeFi, Uniswap, and Crypto.com as other crypto-based firms that will be scrutinized to follow the nation’s regulatory framework.