Binance is leaving the Netherlands after failing to secure a virtual asset service provider (VASP) license from the local regulator.
Starting at midnight UTC on July 17, Binance will no longer onboard new Dutch customers. Existing ones must withdraw funds.
Binance Business Under Global Pressure
Customers received a comprehensive email on their asset holdings and instructions on what to do.
“Although we explored many alternative avenues to service Dutch residents in compliance with Dutch regulations, unfortunately, this has not resulted in a VASP registration in the Netherlands at this time,” read the email.
The company is in talks with Dutch regulators on the way forward.
The departure is the latest headwind to hit a company already forced to curtail services in multiple jurisdictions, including Nigeria, Canada, Cyprus and Australia.
The exchange was sued by the US Securities and Exchange Commission for mishandling customer funds, among other things.
The SEC lawsuit also alleges Binance deliberately sought to mislead regulators through an opaque corporate structure.
Recently, its American business laid off staff in compliance and legal departments. Chief Strategy Officer Patrick Hillman affirmed the exchange grew its compliance department after glaring compliance gaps in its early years.
Binance CEO Changpeng Zhao had previously denied rumors of a mass layoff at Binance. There were reports in media outlets that 20% of the workforce would be let go due to poor market conditions.
He called the reports FUD and said that the company has a “bottom-out policy.”
Exchange Launches Risk Management PR Campaign
Europe’s Markets-in-Crypto Assets regulation, likely to become effective in about 17 months, allows local regulators to grant licenses that can be passported throughout the European Union.
MiCA’s Transfer of Funds money laundering rules compel exchanges to identify both parties involved in a crypto transaction irrespective of the amount.
Binance has already secured licenses from regulators in France, Spain, Poland, and Italy. France’s regulator prevents it from offering trading using privacy coins.
However, EU supervisory board member Elizabeth McCaul argued in April that MiCA missed a fundamental point that led to the collapse of FTX. She said new regulations should consider a company’s international footprint when assessing its risk profile.
Recently, Binance released a video series describing its approach to risk management. According to security head Jimmy Su, it simulates attack vectors to determine the effectiveness of its defense.
And the company has asked analytics firm Chainalysis to screen on-chain transactions for suspicious activity linked to money laundering.
Learn about the key differences between anonymity and pseudonymity here.
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Artificial intelligence algorithms detect abnormal trading activity, including logins from different places, abnormal withdrawal timing, and amounts.
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