Recently, Binance has been facing troubles at various locations across the globe. Few days back, the exchange had announced to terminate services in the Netherlands after failing to secure the required license.
In a recent revelation, De Nederlandsche Bank (DNB), the central of Netherlands said that it cannot share details of Binance’s registration failings in the country due to the confidentiality requirements of its supervisory laws. Reportedly, the details behind Binance’s failed efforts to register for a virtual asset service provider (VASP) license in the Netherlands remain unclear due to the confidentiality requirements of the Dutch central bank’s supervisory laws.
On Friday, Binance declared that it would terminate its services in the Netherlands with immediate effect, after it failed to get the required clearance from the central bank. From July 17, Dutch customers will only be able to withdraw assets from the platform, while trading and deposits were stopped on the date of the announcement.
Additionally, Binance claimed it had undergone a “comprehensive registration application process” to obtain a VASP license in the Netherlands and explored “alternative avenues” to serve Dutch residents in the country. The exchange indicated that it would continue its effort to obtain authorization to provide its services and products in the country.
Speaking to media, Tobias Oudejans, DNB press officer for supervision, fintech, cryptocurrencies, resolution and payment systems, said that the central bank could not share more details about Binance’s registration due to legal requirements of supervisory laws. Quoting him:
Because of confidentiality as demanded by our supervisory laws, we cannot elaborate on anything concerning our supervision on individual institutions or the possible licensing trajectories they may be in.
Further, Oudejans said that the DNB wanted to stress that its perceived silence over this specific supervisory outcome and similar issues “might wrongly be attributed to an unwillingness to comment,“ but was necessitated by Dutch laws. In particular, the bank does not have a negative attitude to crypto entities and has already issued licenses to several crypto firms which are settled in the Netherlands.
Reportedly, if Binance would have successfully registered, it would have joined a list of 35 VASPs registered the central bank. Among the listed firms, some notable names include Coinbase Custody International, Coinbase Europe, eToro (Europe), BitPay and Bitstamp.
Explaining the registration process, Oudejans said that VASP registration requirements in the Netherlands align with similar requirements for other financial institutions under the central bank’s supervision. These requirements are based on the Netherlands Anti-Money Laundering and Anti-Terrorist Financing Act.
However, the implementation of the European Union’s recently published Markets in Crypto-Assets regulation (MiCA) could provide Binance an alternative road to operate in the Netherlands which is scheduled to implement next year across the bloc. Oudejans explained, the global exchange could gain access to the Dutch market if it has met the necessary requirements in other EU member.
It is not yet clear in what way MiCA will be implemented in the Netherlands, but indeed it looks like it will be a different law than the WWFT and possibly on a European level, there may be access to the Dutch market for registered entities from other EU-countries.
On this end, Binance has already indicated that it is ramping up efforts to be fully compliant with the new EU rules set out in MiCA. Additionally, Binance was fined 3.3 million Euro ($3.6 million) by the DNB in July 2022 for operating without clearance in the Netherlands.
All of this adds to the troubles Binance has been already facing. On June 5th, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit on Binance over allegations that it has been operating as an unregistered securities exchange, broker and clearing agency. The regulator also alleged that Binance illegally solicited U.S. customers, commingled user and corporate funds, and failed to comply with anti-money laundering rules.
On top of this, Binance is also under investigation by the US DoJ for laundering money to Russia amid the ongoing war with Ukraine. And not just US, French authorities are also investigating Binance for multiple infringements including operating without license and money-laundering.