German Regulator Raises Concerns About Binance CEO Prior To Crypto Coins License Application Withdrawal.
German regulator raised concerns about Binance CEO prior to license application withdrawal: Report

Binance Withdraws Licensing Application in Germany

The German Federal Financial Supervisory Authority, or BaFin, reportedly advised crypto exchange Binance to withdraw its licensing application due to issues with CEO Changpeng Zhao and the firm’s structuring. According to a July 28 report from The Wall Street Journal, BaFin advised Binance that Zhao, also known as “CZ,” may not have passed the “fit and proper” test under the financial watchdog’s regulatory guidelines. The guidelines for a license application state that managing directors must “have the required professional qualification and be of good repute to manage an institution and must dedicate sufficient time to performing their functions.”

BaFin also reportedly told Binance that its structure hindered regulatory supervision. On July 26, Binance announced that it had withdrawn its application in Germany, citing the need to focus on becoming compliant with the European Union’s Markets in Crypto-Assets (MiCA) framework.

A spokesperson for Binance told Cointelegraph that The Wall Street Journal story was inaccurate. The crypto exchange did not provide a specific response on the details regarding CZ at the time of publication.

Binance Facing Legal Actions in the US

The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have brought legal actions against crypto exchange Binance in the United States. On July 27, lawyers for the exchange requested the dismissal of the CFTC lawsuit, arguing that the commission had exceeded its authority.

At the time of publication, no criminal charges had been brought against Binance, however reports suggested the U.S. Department of Justice (DoJ) was investigating the exchange for violating U.S. sanctions on Russian entities. Patrick Hillmann, the crypto exchange’s chief strategy officer, announced his departure from the firm on July 6, which is believed to be in response to the DoJ probe.

Despite being one of the largest crypto exchanges in the world, Binance does not have a physical headquarters. Reports have suggested that CZ, the CEO of Binance, has been living in Dubai since 2021, however the SEC had difficulty issuing him a legal summons in June.

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