Binance’s expansion into Europe looks to have hit new roadblocks, with Spanish market officials renewing their pressure. Binance is the largest cryptocurrency market in the world and the trading place of a lot of cryptos including NFT utility tokens like Decentraland, Quint, Sandbox and so on.
According to local media reports, Binance has been requested by Spain’s market regulator, the National Securities Market Commission (CNMV), to shut down its crypto derivatives service in the nation.
Despite the fact that the world’s largest crypto exchange recently received full regulatory permission in France, the action comes as a surprise. The exchange now plans to use France as a springboard for a continental conquest.
However, this expansion coincides with the European Union’s increasing regulatory scrutiny of cryptocurrency. The bloc just approved new legislation that effectively bans decentralized wallets and puts tight reporting requirements on all cryptocurrency transactions.
The CNMV has urged Binance to reduce its derivatives sales, according to Spanish news outlet La Informacion. While the move has no significant financial implications for the exchange, it demonstrates Spanish officials’ reluctance to open their doors to the exchange.
The exchange appears to have removed all derivatives-related content from its Spanish website. However, it allows those with continuous contracts to keep their jobs.
The CNMV’s antipathy to crypto derivatives stems from the huge possibility for investors to lose money in the market. In 2021, it expressed concern over this.
Binance falls under a murky area of financial legislation in Spain. The exchange has yet to receive a formal virtual currency license from Spain’s central bank, despite applying for one in early 2021.
Other exchanges such as local Bit2Me have already secured regulatory approval. But this approval also means that exchanges will have to comply with strict reporting and anti-money laundering laws.
According to reports, the crypto exchange mostly followed regulatory guidelines in order to gain license from the central bank. However, this strategy isn’t unique to Spain.
To appease financial regulators, the exchange has often claimed its adherence to local regulations. It’s also one of the first exchanges to abide by tough economic restrictions imposed on Russia as a result of its invasion of Ukraine.
Despite this, Binance’s regulatory journey has not always been easy. Due to increased scrutiny from the financial watchdog, the exchange had to shut down operations in Canada’s most populated province.