Cryptocurrency exchange Binance, which obtained its 7th regulatory license in the European Union region in January, has applied for the deregistration of its local unit in Cyprus. The exchange gained a Cypriot license to operate as a crypto asset services provider in October last year.
“Binance Cyprus Limited under examination for application for deregistration,” Binance’s profile on the website of the Cyprus Securities and Exchange Commission (CySEC) currently reads. However, the Cypriot watchdog did not state why the exchange is seeking to withdraw its local unit in the island country.
The move to pull away from Cyprus is occurring as Binance and rival Coinbase face regulatory scrutiny in the United States. Earlier in the month, the US Securities and Exchange Commission (SEC) sued Binance and Changpeng Zhao, its CEO, alleging that the exchange and its chief operated crypto exchanges (Binance.com and Binance.US) and offering unregistered securities.
Binance Prepares for MiCA
While CySEC did not explain why Binance was leaving the jurisdiction on its website, a Binance spokesperson told CoinDesk the exchange decided to pull the plug on its services in the country in order to focus its efforts on its “fewer regulated entities in the EU.”
The cryptocurrency exchange further explained that it was preparing its business to be compliant with the landmark crypto rules, Markets in Crypto Assets (MiCA), which was recently ratified by the two legislative bodies of the European Union. The law is expected to go live sometime in 2024.
MiCA has been described as the world’s first comprehensive crypto law. The regulation seeks to protect European consumers, enshrine environmental sustainability and prevent money laundering in the crypto industry.
When it comes into force next year, MiCA will require digital asset exchanges and crypto wallet providers to obtain a license to operate within any country in the European Union region. It will also require stablecoin issuers to hold sufficient reserves.
Where Does Binance Stand?
Meanwhile, as the SEC's case against Binance continues in the United States, the cryptocurrency exchange is making an effort to keep the operations of its local unit in the country from crumbling. However, the exchange exited Canada last month, blaming the country's requirements around stablecoins and investor limits.
On the contrary, Binance re-entered the Japanese crypto market in May despite its rivals’ retreat from the country. This is even as the exchange disclosed plans to move its Japan-based customers to its new locally compliant platform by year-end.
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