According to local media reports, Binance has been requested by Spain’s market regulator, the National Securities Market Commission (CNMV), to shut down its crypto derivatives business in Spain. Despite the fact that the world’s largest crypto exchange just received full regulatory permission in France. This action by CNMV has come as a surprise to Binance.
According to Spanish news outlet La Informacion, CNMV has urged Binance to reduce its derivatives sales. While the move has no significant financial implications for the exchange, it demonstrates Spanish official’s reluctance to give green signal to the exchange.
The exchange appears to have deleted all derivatives-related content from its Spanish website. However, it allows those with continuous contracts to keep their jobs.
The CNMV’s antipathy to crypto derivatives stems from the high possibility for investors to lose money in the market. In 2021, it expressed worry over this. Binance falls under a murky area of financial legislation in Spain. The exchange has yet to receive an official virtual currency licence from Spain’s central bank, despite applying in early 2021.
Other exchanges, such as Bit2Me in the United Kingdom, have already received regulatory clearance. However, this licence also implies that exchanges must adhere to stringent reporting and anti-money laundering regulations.
According to reports, the crypto exchange mostly followed regulatory guidelines in order to gain a licence from the central bank. However, this strategy isn’t unique to Spain.
Roadblocks in Binance’s European domination plans
Following a run of regulatory setbacks, Binance was given authorization to operate in France on May 4, marking the crypto exchange’s first substantial European victory. Currently, Binance is planning to use France as a springboard for a continental takeover.
However, this expansion coincides with the European Union’s (EU) increasing regulatory scrutiny of crypto. The EU has just approved new legislation that effectively bans decentralised wallets and imposes tight reporting requirements on all crypto transactions.
To appease financial regulators, the exchange has often claimed its adherence to local regulations. It’s also one of the first exchanges to abide by the tough economic restrictions imposed on Russia as a result of its invasion of Ukraine.
Despite this, Binance’s regulatory road has not always been easy. Due to heightened scrutiny from the financial watchdog, the exchange had to shut down operations in Canada’s most populated province.
