The world’s biggest crypto exchange Binance has announced that it will leave the Dutch market after failing to secure a service provider license. VASP is a license that attests that its holder meets anti-money laundering (AML) guidelines.
The company’s withdrawal means it will no longer be able to take on new clients nor allow new deposits or trades on its platform. Clients residing in the Netherlands will only be able to withdraw their assets from Binance.
The news comes just two days after the company had announced it would be deregistered from the list of crypto traders with Cyprus’ SEC, citing that it wants to focus more on becoming fully compliant with the new European Union rules on crypto-assets (MiCA).
On the American front, however, Binance is facing dire legal challenges with the SEC. The US Securities and Exchange Commission has filed thirteen lawsuits against the exchange, causing it to halt most of its operations in the country.
The company’s website announcement stated, “Although Binance explored many alternative avenues to service Dutch residents in compliance with Dutch regulations, unfortunately, this has not resulted in a VASP registration in the Netherlands at this time.”
“This, unfortunately, means that no new users residing in the Netherlands will be accepted as of today. Starting from 17 July 2023, existing Dutch resident users will only be able to withdraw their assets from the Binance platform. No further purchases, trades, or deposits will be possible. We encourage those users to take appropriate action by withdrawing assets from their accounts.”
While Binance has failed to meet Anti-Money Laundering guidelines in the Netherlands, the crypto exchange has successfully met AML requirements in France, Italy, Spain, Poland, Sweden, and Lithuania.
Two days prior, the company applied for deregistration from the crypto asset service providers list in Cyprus. Registration permitted Binance to provide spot trading, crypto custody, and other services to residents of the island nation. While Binance was in compliance with the nation’s anti-money laundering and counter-terrorist financing rules, sources at Cyprus SEC claim that Binance never actually launched its business in the country.
Earlier this month, the US SEC filed thirteen lawsuits against Binance and its founder Changpeng Zhao. These lawsuits include many serious allegations, including evasion of US regulators, commingling of customer funds, wash trading and artificially inflating trade volumes.
Troubles started reaching alarming heights when Binance, the world’s biggest crypto exchange, announced it will halt all USD transactions on its platform. Shortly after, Binance announced it will also be halting all OTC trades and trade pairs.
Crypto legal experts speculate Binance and CZ might face federal charges filed by the US Department of Justice following the SEC lawsuits. The likelihood of this event was confirmed when Binance brought George Canellos onto their legal team. Canellos is a former deputy director of the SEC’s Enforcement Department and a former prosecutor with the DOJ.
Exits from multiple markets in the European Union and a bleak legal status in the US may lead some to wonder if Binance has the potential in operating in the Western market altogether.