Whats the Main Reason Binance Lost Its EU MiCA Licence?
TLDR
- Binance failed to secure a MiCA license before the July 1 EU deadline.
- Binance withdrew its MiCA license application in Greece last week.
- Some EU users can still access withdrawals and transfers where applicable.
- Regulators raised concerns over Binance’s financial-crime compliance history.
- OKX CEO Star Xu questioned Binance’s MiCA compliance approach in Europe.
Binance has restricted services for some European users after failing to secure an operating license before the European Union’s July 1 MiCA deadline, as regulators raised concerns over the exchange’s financial-crime compliance history.
The exchange withdrew its MiCA license application in Greece last week and said it would seek approval in another EU member state. Without a license, Binance cannot use MiCA’s passporting system to offer regulated crypto services across the bloc.
Binance told affected users they would retain access to options already communicated to them, including withdrawals where applicable. The company said user assets remain safe and held on a 1:1 basis.
Binance Misses MiCA Deadline
Binance failed to obtain a MiCA license before the July 1 deadline, when unlicensed crypto firms were required to stop or wind down services in the European Union. The rules require crypto asset service providers to gain approval from a national regulator before serving users across the bloc.
The exchange had filed an application in Greece, but the approval did not arrive before the deadline. Binance later withdrew the application and said it would continue seeking authorization elsewhere in the EU.
A Binance spokesperson said its application had been deemed “complete and compliant” by Greece’s financial regulator and was presented to the EU regulator on that basis. The spokesperson said there were no outstanding queries on Binance’s compliance.
Binance also said MiCA was designed to create a clear and harmonized framework across Europe, not a process where applicants could be “privately undermined through informal channels.”
Financial-Crime Concerns Draw Scrutiny
The Wall Street Journal reported, with a photo credited to Bloomberg News, that the EU’s markets regulator had privately advised national regulators to block Binance applications, citing concerns tied to the exchange’s financial-crime compliance history.
The European Securities and Markets Authority said it cannot comment on specific decisions. It said it works with national authorities to support consistent rule application and reduce regulatory arbitrage.
Binance pleaded guilty in 2023 to U.S. anti-money-laundering and sanctions violations and paid a $4.3 billion fine. Founder Changpeng Zhao also pleaded guilty to a related charge and served a four-month sentence before receiving a presidential pardon last November.
Binance has said it has “zero-tolerance for illicit activity” and has built a “best-in-class compliance program.” The exchange has also disputed reports about sanctions-related activity and filed a lawsuit over certain reporting.
CZ Says Other Forces Opposed License
Zhao said in a recent interview that two EU countries had wanted to give Binance a license. He said, “Unfortunately there were other forces that were against it,” while referring to politics and other factors.
He did not provide documents proving political intervention. His comments came after Binance said it would continue seeking EU approval despite the Greek application withdrawal.
Binance has told affected EU users that they can still access certain options, including transfers and withdrawals where applicable. CEO Richard Teng also said the company is working with regulators and contacting users directly with next steps.
OKX founder Star Xu challenged Binance’s public framing. He said Binance appeared to deny facts rather than address evidence, adding that companies should correct compliance gaps instead of looking for loopholes.
OKX CEO Questions Binance EU Approach
Star Xu said only some European jurisdictions were affected by Binance’s restrictions, naming Italy, Spain, France, Poland, Belgium, and Sweden. He claimed users in other EEA markets could still sign up, deposit, and trade.
He said this raised questions about consistent MiCA enforcement across the European Economic Area. Binance has not publicly confirmed the same country-by-country framing in the provided statements.
Xu also said safeguarding customer funds is a basic requirement, not a point to boast about. He warned that regulatory arbitrage and ignoring rules could create harm for customers and the wider industry.
The post Whats the Main Reason Binance Lost Its EU MiCA Licence? appeared first on CoinCentral.
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