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The world’s largest crypto exchange Binance and CEO Changpeng “CZ” Zhao is under intense scrutiny from regulators in the euro area after US SEC and CFTC lawsuits against Binance, according to the Wall Street Journal. Binance currently withdraws from several EU countries and the latest exit from Germany follows after the financial regulator advised Binance to withdraw its license application.
Binance Regulatory and Banking Partner Challenges in Europe
Germany’s financial regulator BaFin recommended Binance to withdraw its license application in the country. The regulator has concerns about CEO CZ and the crypto exchange’s complicated structure, reported the Wall Street Journal on July 29.
According to people familiar with the decision, Binance CEO CZ wouldn’t pass a “fit and proper” test. Furthermore, the organizational structure of Binance impeded the effectiveness of regulatory oversight, making supervision difficult for regulators.
Binance has withdrawn license applications in the Netherlands, Austria, Germany, and Cyprus. The crypto exchange faces scrutiny from France, Belgium, the UK regulators, even losing its European banking partner PaySafe.
After losing USD and AUD support, some believe Binance is being cut off from the European banking system. The challenges for Binance CEO CZ continue to rise amid renewed scrutiny in the euro area. Top executives have exit from multiple Binance’s subsidiaries across the world.
However, a spokesperson for Binance said it proactively withdrew its application for a number of reasons, including efforts on gaining a new European Union crypto license.
“Binance will continue to cooperate with the regulatory authorities and continues to pursue the necessary regulatory approvals to actively conduct business in Germany.”
Also Read: Prominent XRP Attorney Withdraws From Ripple Vs US SEC Lawsuit
Binance Lawsuits and Investigation in the US
The US SEC and CFTC have filed lawsuits against Binance and CEO CZ. Amid the latest developments, Binance filed a motion to dismiss the CFTC lawsuit claiming that the regulator has no jurisdiction over the global entity and the allegations are vague.
Meanwhile, the SEC and Binance have agreed on separating the wallets, hardware, and management of Binance and Binance.US, arguing that the exchange hasn’t violated any security laws.
Binance also faced DOJ investigations, with some experts revealing that a lawsuit against the crypto exchange and CEO is imminent.
Also Read: Binance And US SEC Submits Response To Intervention By Third Party In The Lawsuit
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