Copy of 2023-06-10T112338Z_905103107_RC29F1ADNRJ9_RTRMADP_3_NIGERIA-CRYPTOCURRENCY-1686923273545
Binance, which says it has no defined global or regional headquarters, holds registrations in other European Union countries including France, Italy and Spain. Image Credit: REUTERS

Amsterdam: Binance Holdings said it is leaving the Netherlands after failing to register with the country’s financial authorities, as the world’s largest cryptocurrency exchange faces escalating pressure from regulators across the globe.

“With immediate effect, no new users residing in the Netherlands will be accepted,” Binance said in a statement on Friday. Starting Saturday Binance will only process withdrawals for existing Dutch resident users, it said.

The Dutch Central Bank last year fined Binance for offering crypto services in the Netherlands without the required registration with the monetary authority. Dutch authorities ruled in May 2020 that any company seeking to offer crypto services in the Netherlands must comply with the country’s laws against money laundering and terrorism financing.

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The company said on Friday that it couldn’t obtain registration as a virtual asset service provider “although we explored many alternative avenues to service Dutch residents in compliance with Dutch regulations.” Binance vowed to continue trying to secure authorizations to operate in the Netherlands.

“We have taken note of Binance’s announcement,” said the Dutch Central Bank in an emailed statement. “In the past, we issued warnings that Binance is not registered but nevertheless offers its services in the Netherlands. We also imposed an administrative fine on Binance for this reason.”

The challenges faced by Binance in the Netherlands add to its growing list of regulatory headaches around the world, after having come under increased scrutiny from various authorities in recent months. Earlier in June, US Securities and Exchange Commission sued Binance and CEO Changpeng Zhao for allegedly mishandling customer funds, misleading investors and regulators, and breaking securities rules. The case follows a lawsuit from the US derivatives watchdog in March that alleges Binance and Zhao routinely broke its rules. The company has disputed allegations.

Elsewhere the Australian Securities and Investments Commission last month canceled Binance’s license for its derivatives business in the country as it conducts a review of the group’s local operations. Binance said at the time that it would wind down its derivatives exchange in Australia, while the spot platform would remain open.

The Dutch Central Bank said Binance’s obligation to register as a crypto service provider is laid down in legislation which “aims to further the integrity of the financial system and prevent crypto service providers or their customers from becoming involved in money laundering or terrorist financing.”