Regulation
Binance complies with MiCA regulations and restricts unauthorized stablecoins in the EU
Binance, the largest cryptocurrency exchange globally in terms of trading volume, recently declared significant operational changes in response to upcoming regulations in the European Union.
The exchange is set to restrict access to stablecoins deemed unregulated by the EU’s new Cryptocurrency Markets Regulation (MiCA), which comes into force at the end of June.
Binance implements a phased approach to MiCA compliance
The implementation of MiCA represents a substantial step towards more rigorous oversight in the stablecoin industry. A key element of MiCA is the licensing obligation for stablecoin issuers, requiring them to obtain approval from relevant EU authorities.
This regulation also requires issuers to adhere to several operational protocols, including approval of a “white paper” by national regulators, maintaining sufficient reserves and ensuring safe custody of underlying assets.
When asked for details on which stablecoins would be classified as “unregulated” and therefore affected by these restrictions, Binance did not provide an immediate response.
To comply with upcoming regulatory changes, Binance has outlined a phased approach to managing the transition. Users holding “rogue” stablecoins will have the option to convert their holdings into other digital assets such as bitcoin, ether, regulated stablecoins, or fiat currency. From June 30th in Europe it will no longer be possible to purchase “unauthorized” stablecoins.
Binance Announces Service Changes in the EEA to Comply with MiCA
The company also announced several changes to its services in the EEA, which will also come into effect at the end of June. Rewards from campaigns and referrals will be distributed in regulated stablecoins, BNB or other non-stablecoin tokens.
Copy trading for EEA users will be stopped from June 29th at 20:59 UTC. New unauthorized stablecoin lending will be prohibited and EEA users will no longer have access to the FDUSD pool on Binance Launchpool. Subscriptions to various services including Simple Earn, Binance Loans, VP Loans, Dual Investment, Cloud Mining and related offers will be limited by June 29 at 20:59 UTC.
These adjustments coincide with the enforcement of MiCA regulations, which aim to strengthen consumer protection and economic stability by imposing stringent requirements on stablecoin issuers.
The company’s new CEO, Richard Teng, who took over after former CEO Changpeng Zhao was sentenced to four months in prison in April, has been actively working to improve the company’s cooperation with regulators. This change is part of Binance’s broader strategy to adapt to the evolving regulatory landscape.
Deletion of crypto assets that do not meet industry standards
In a related development, Binance has announced that it will do so remove several crypto assets, including OmiseGO (OMG), Waves (WAVES), Wrapped NXM (WNXM), and NEM (XEM). The decision is part of Binance’s ongoing efforts to ensure that all coins listed on its platform meet specific industry standards.
The exchange evaluates assets based on factors such as project team commitment, trading volume and liquidity, network stability and security, level of public disclosure, and compliance with new regulatory requirements.
The delisting will take effect on May 17 at 03:00 (UTC) and all trading pairs involving these tokens, such as OMG/USDT, WAVES/BTC, WAVES/ETH, WAVES/TRY, WAVES/USDT, WNXM/ USDT, and XEM/USDT will be removed. Binance will automatically cancel all trade orders involving these tokens after expiration.
Binance has informed its users that those holding tokens removed by September 18 may see their holdings automatically converted to stablecoins, although this is not guaranteed. If such a conversion occurs, Binance will notify users before the process is completed. Eligible accounts will receive the equivalent value of the stablecoin after conversion.
These announcements reflect Binance’s commitment to addressing the complexities of regulatory compliance while continuing to offer robust services to its global user base. As the cryptocurrency industry matures, exchanges like Binance are increasingly required to adapt to rigorous regulatory environments, balancing innovation with compliance to maintain their market leadership.