Crypto Giant Binance Struggles in Europe

The_Krakenite · Jul 7, 2023

The risk there is... too many religious zealots to still pump BNB full-retard.

The_Krakenite · Jul 7, 2023

Now that I've been thinking on it some more, I suppose the traditional old-school hedgefund method of hedging the trade by going Long Ethereum, while Shorting BNB is a 'relatively safe way to do this without making things too complicated.

traderjo · Jul 9, 2023

ETJ said:
Crypto Giant Binance Struggles in Europe
The Netherlands and Belgium have barred it, Germany hasn’t issued it an operating license and French prosecutors are investigating it

Patricia Kowsmann
and

Caitlin Ostroff
July 4, 2023 12:01 am ET

Binance CEO Zhao Changpeng vowed to get licenses and embrace regulation after many countries started issuing warnings against the company. PHOTO: COSTAS BALTAS/REUTERS
Crypto giant Binance opened a regional headquarters in Paris last year, hoping to expand its business in Europe. Things haven’t gone its way.

The Netherlands and Belgium have shut their doors to the exchange. Germany, Europe’s largest economy, hasn’t yet given it a license to operate. And French prosecutors recently searched the exchange’s office as part of an investigation of money laundering controls.

Binance’s share of euro-denominated crypto trading has fallen to about 15% from over 30% in January, according to research firm Kaiko.

Regulators have shifted gears this year, placing greater scrutiny on crypto exchanges’ operations following the collapse of FTX.

The harsher stance from European regulators threatens to further curtail Binance’s footprint and force it to increasingly rely on markets in Asia, Africa and Latin America. Countries such as Vietnam, Turkey, India and Argentina already draw the highest user traffic at Binance, although France, Germany and the Netherlands are in the top 25, according to May data from analytics firm SimilarWeb.

The setbacks add to Binance’s woes in the U.S., where it is battling a lawsuit from the Securities and Exchange Commission and an ongoing criminal investigation from the Department of Justice.

A Binance spokesman said the company is focused on meeting the requirements of a new European Union legislation that will govern digital-asset companies across its 27 member states expected to kick in next year. In the meantime, he said, “we continue to work to proactively comply with our requirements.”

Crypto firms are excited about the new EU legislation, called MiCA, because it will allow for companies authorized in one member state to offer services in all of them. But provisions exist for countries to ban crypto businesses if their regulators feel there is a risk to their users, said Trenton Kennedy, a spokesman for Chainalysis.

While Binance remains by far the largest crypto platform in the world, its troubles are taking a toll. Binance’s global market share for spot trading fell to 42% in June—its fourth consecutive month of declines from its peak of 57% in February, according to data provider CCData. The exchange said the end of its zero-fee bitcoin trading contributed to the loss.

Founded by Changpeng Zhao in 2017, Binance grew at lightning speed as most regulators around the world stayed on the sidelines.

When many countries started issuing warnings against Binance, Zhao vowed to get licenses and embrace regulation. In May 2022, Binance declared Paris its first regional headquarters, after spending more than a year and a half obtaining registration approval in France.

“Having a G-7 country with a strict regulator sends a very strong signal to the other countries,” Zhao told The Wall Street Journal in an interview then.

Binance’s freewheeling past, however, continues to haunt it.

French prosecutors are investigating the exchange for lack of money laundering controls and the illegal offering of services before Binance received registration, according to a statement from the Paris prosecutor’s office. Investigators took documents and electronics during the search, it added.

Binance’s spokesman confirmed authorities made an on-site visit to the Paris office, but declined to comment “on the specifics of law enforcement or regulatory investigations.”

Last month, Belgium’s Financial Services and Market Authority ordered Binance to cease offering services in the country, saying the exchange was doing so using companies outside the European economic area, which is forbidden. Days earlier, Binance said it was leaving the Dutch market after it failed to get a registration.

The exchange has also struggled to get approval to operate in Germany, where BaFin, the markets regulator, offers crypto-custody licenses.

“We continue to work to comply with BaFin‘s requirements,” Binance’s spokesman said.

Seven companies currently have the BaFin license, including American crypto exchange Coinbase.

The increased regulatory scrutiny in the U.S. and elsewhere has spooked some banks and other companies providing financial services for the exchange.

Last week, Paysafe, which supports euro transfers to and from Binance, said it would stop providing the service. It follows a move to stop British pound services it announced earlier this year.

The Securities and Exchange Commission is separately suing two major cryptocurrency platforms, Binance and Coinbase. WSJ’s Caitlin Ostroff breaks down the lawsuits and their potential impact on the crypto industry. Photo illustration: Adam Adada/Xingpei Shen
Write to Patricia Kowsmann at patricia.kowsmann@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com
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What I dont get is with all the money they have is it really that difficult for them to get regulated by CFTC atleast?

johnarb · Jul 9, 2023

RedDuke said:
if there any way to bet against BNB? This could be the way.
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The_Krakenite said:
If only... I could have shorted Binance.
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The low-risk, low-leverage way to short BNB is to borrow on defi platform by depositing wEth (wrapped Eth) as collateral around 80% LTV, but the big ones that support BNB are on the Binance Smart Chain so if BNB blows up, would the BSC still exist?

I believe Venus is the biggest defi market for borrow/lend market of BNB

Say you borrowed 100 BNB (with proper ratio of wEth collateral), you'd quickly trade these for Eth to put back to your local wallet. This reduces your platform risk and BSC protocol risk, greatly

If the position moves against you, you can deposit more wEth from your local wallet to the defi platform to add to your collateral

If you need help, we can discuss step by step on the thread

https://defillama.com/yields?token=BNB

If you want degen leverage shorting of BNB, then I highly suggest perpetual futures on CEX or DEX

mervyn · Jul 9, 2023

traderjo said:
What I dont get is with all the money they have is it really that difficult for them to get regulated by CFTC atleast?
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cryto is not a product.

RedDuke · Jul 10, 2023

traderjo said:
What I dont get is with all the money they have is it really that difficult for them to get regulated by CFTC atleast?
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they running a fraud that is why.

traderjo · Jul 10, 2023

mervyn said:
cryto is not a product.
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Whatever it is at the end of the day people invest real money and speculate correct so it is a financial product and any exchange and the products should go through regulatory scrutiny .. or you are supporting even equity IPO not to be scrutinized... sure you can believe in crypto all you like but when it comes to real money