European Countries Co-Investigating Binance Alongside US SEC – Report

The recent indictment of Binance by the United States Securities and Exchange Commission (SEC), has set off a chain of reactions among European authorities.

Cross Atlantic Investigation

Recent reports from Protos have revealed that the SEC has been actively soliciting information from various European authorities regarding Binance’s activities for some time now. While some countries have already taken steps in response to the SEC’s indictment, others are still assessing the intricacies of the case and have yet to comply with the SEC’s information requests.

Meanwhile, the news comes shortly after the company announced that it has withdrawn its Virtual Asset Service Providers (VASP) registration in Cyprus and ceased offering services in the Netherlands due to a lack of required licensing. 

These decisions come as Binance prepares for the forthcoming Market in Crypto Assets (MiCA) regulations, which will impose stricter rules on crypto exchanges and service providers in the European Union (EU).

Unraveling Binance’s Blurred European Network

The extensive layering and dissipation of information through multiple countries, as observed in Binance’s operations, has reportedly affected its European network. Similar to FTX, Binance, the world’s biggest crypto exchange has numerous firms in various European countries. 

Remarkably, Binance has obtained licenses to operate as a crypto exchange in some European countries. For example, it has acquired licenses in countries like France and Cyprus, allowing it to offer its services to customers in those jurisdictions.

Additionally, Binance’s subsidiary, MoonPay, operates in Spain and provides payment services related to cryptocurrencies. Furthermore, Binance has reportedly registered or had entities registered in other European countries, including the UK, Ireland, and Malta.

In terms of revenue, some companies affiliated with Binance have declared relatively small tranches while others have reported significantly higher revenue figures, reaching hundreds of millions in Euros per year.

The presence of loans given to Binance’s affiliated companies by Guangying Chen, an individual associated with the company, has also contributed to the complexity and opaqueness of Binance’s operations. 

Such lending arrangements between a company and its shareholder are not uncommon, but they can make it more challenging to trace the flow of funds and understand the overall financial structure of the organization, a situation that has largely made regulators skeptical of the firm’s standing.