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Now Binance Withdraws as Crypto Service Provider With Cyprus SEC

Published June 14, 2023 4:02 PM
Omar Elorfaly
Published June 14, 2023 4:02 PM

Key Takeaways

  • Binance applies for deregistration from Cyprus’ register of crypto asset service providers
  • The EU is in the process of implementing a clear framework for crypto regulation
  • Binance and CEO CZ are potentially facing criminal charges in the US

Binance, the world’s biggest crypto trading platform, reportedly  applied for deregistration from the crypto asset service providers list in Cyprus. The request comes at a time when the company is facing major legal challenges in the US. Could this be a sign of a Binance withdrawal from Western markets?

The Exchange That Never Was

By registering itself on the list of crypto asset service providers with Cyprus’ SEC, Binance enabled itself to provide spot trading, crypto custody, and other services to residents of the Mediterranean island, in compliance with the nation’s anti-money laundering and counter-terrorist financing rules. However, according to a source at the Cyprus SEC, Binance never actually launched its business in the country.

In related news, the European Union has approved  rules for tracing crypto transfers across the coalition. The new regulations would see that crypto transfers would require data on both receiving and sending parties, particularly on transfers above the value of €1000 coming from private wallets, going to wallets managed by crypto-assets service providers. The rule, however does not apply to person-to-person crypto transfers. 

Moreover, the European Parliament’s announcement highlighted “Key provisions for those issuing and trading crypto-assets (including asset-reference tokens and e-money tokens) cover transparency, disclosure, authorization and supervision of transactions. Consumers would be better informed about the risks, costs, and charges linked to their operations. In addition, the new legal framework will support market integrity and financial stability by regulating public offers of crypto-assets.”

Binance At War

Binance.US, the exchange’s US-based subsidiary is currently in a major legal battle against the US Securities and Exchange Commission. The SEC filed thirteen lawsuits against the crypto exchange, alleging serious violations, such as wash trading, commingling customer funds, and evasion of US regulators. The SEC is also applying pressure on the exchange by requesting that the federal government freeze all Binance.US funds around the world, citing that the commission needs to guarantee no tampering of evidence by company staff, including Binance founder Changpeng Zhao.

The company and its founder could be facing criminal charges from the US Department of Justice following the lawsuits filed by the SEC. Binance and CZ are already taking measures to prepare in the event of such charges by adding George Canellos, a former deputy director of the SEC’s enforcement department and former DOJ prosecutor, to their legal team.

The major crypto exchange has already suffered many losses due to SEC-related battles, including the suspension of any USD transactions on its platform and the suspension of OTC trades, as well as trade pairs. The company’s own token BNB has also experienced a significant slump since the start of litigations. Considering troubles in the US and potential withdrawal from the European market, could this be the beginning of the end for Binance in Western markets?