Binance to Exit Futures and Derivatives Business in Europe Amid Ongoing Regulatory Scrutiny
Binance, the world’s largest cryptocurrency exchange, has announced it will discontinue its futures and derivatives business in Europe, as the ongoing crackdown from global regulators gains momentum.
According to a twitter statement published on Friday, Binance will no longer allow its users in Italy, Germany, and the Netherlands to create new accounts for futures and derivatives trading effective immediately. Users in the affected European countries have been granted 90 days to close any open derivatives positions. The latest move comes as the exchange platform faces heightened scrutiny from regulators around the world.
However, the latest move will also likely carry implications for retail investors, particularly those trading crypto derivatives. “A huge amount of money in crypto markets is floating around exclusively because of the existence and availability of such products,” explained Joseph Edwards, a cryptocurrency broker at London-based Enigma Securities, to Reuters. “Binance have crowded out large sections of the derivatives market over the last couple of years— if their retreat from said market deepens, the medium-term impact is unlikely to be positive.”
Binance’s decision to pull out from derivatives marks the latest move to forego a specific crypto product. Regulators in Italy, Germany, the UK, and Hong Kong have grown increasingly concerned about the lack of oversight on anti-money laundering controls across crypto exchanges, and as a result have cracked down on Binance, which seemingly has floated through regulatory scrutiny up until recent.
On Tuesday, Binance CEO Changpeng Zhao said that the crypto exchange is looking to make amends with regulators, adding that the platform is looking to gain approval to create regional headquarters. Although it is certainly a positive sign for Binance fans, it appears that the crypto exchange may have finally been backed into a corner following an onslaught of problems, which can be explored further here, here, here, here, here, here, and here.
Information for this briefing was found via Binance and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.