BaFin allegedly believed that Binance CEO could not pass the "fit and proper" test.
After the German Federal Financial Supervisory Authority, known as BaFin, voiced apprehensions about Binance's CEO, Changpeng Zhao, and its organizational structure, the renowned cryptocurrency exchange felt compelled to retract its application for a German license.
The Wall Street Journal's July 28th report unveiled that Binance was advised by BaFin to withdraw its application, given that the CEO, also known as CZ, might fail to meet the necessary "fit and proper" criteria under the regulator's guidelines.
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BaFin's criteria for license applications dictate that managing directors should "have the required professional qualification and be of good repute to manage an institution and must dedicate sufficient time to performing their functions." In addition, BaFin expressed reservations about the structure of Binance, arguing that it poses challenges to regulatory oversight.
Consequently, on July 26th, Binance revealed it had withdrawn its German application. The company explained that this move was partly due to its commitment to ensuring compliance with the European Union's Markets in Crypto-Assets (MiCA) framework.
The license application withdrawal comes as no surprise. During the past few months, Binance left the Netherlands, Cyprus, and the United Kingdom.
Binance is also grappling with legal issues in the United States. The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) accused the company of alleged securities laws and trading violations. Binance's lawyers, in a court filing dated July 27th, sought the dismissal of the CFTC lawsuit, arguing that the commission had overstepped its boundaries.
As Binance sails through this regulatory storm, the international crypto industry is watching closely. The decision to pull back its application for a German license underscores the continuing challenges and ambiguities faced by crypto businesses around the world.
