Binance’s expansion into Europe appears to have met fresh hurdles, as it faces renewed pressure from Spanish market regulators.
A report from local media sources showed that Spain’s market regulator, the National Securities Market Commission (CNMV), has asked Binance to wind down its crypto derivatives service in the country.
The move comes despite the world’s largest crypto exchange recently winning full regulatory approval in France. The exchange now intends to use France as a launchpad for a European conquest.
But this expansion also comes amid growing regulatory scrutiny of crypto by the European Union. The bloc recently voted in favor of new laws that essentially ban decentralized wallets, and impose strict reporting requirements on all crypto transactions.
Spain apprehensive over crypto approval
Spanish news house La Informacion reported that the CNMV asked Binance to wind down its derivatives offerings. While the move does not have large financial ramifications for the exchange, it indicates hesitance among Spanish regulators to open their doors to the exchange.
The exchange now appears to have removed any instances of derivatives from its Spanish website. But it is allowing holders of ongoing contracts to maintain their positions.
The CNMV’s aversion to crypto derivatives comes from the enormous loss-making potential for investors exposed to the space. It had cited concerns over this in 2021.
Binance occupies a gray area in Spain’s financial regulation. The exchange is still awaiting an official virtual currency license from Spain’s central bank- one that it had applied for 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.
Binance eager to win regulatory approval
Reports indicate that the crypto exchange has largely complied with regulatory standards in a bid to win the central bank’s approval. But this approach isn’t limited only to Spain.
The exchange has consistently cited its adherence to local laws in order to court financial regulators. It is also one of the first exchanges to comply with strict economic sanctions against Russia over its invasion of Ukraine.
Still, Binance’s regulatory journey has not always seen smooth sailing. The exchange had to wind down operations in Canada’s most populous province over increased scrutiny from the financial watchdog.