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Binance News
Recently it seems like BINANCE has finally agreed to stop trying to buck regulators in European countries and instead work with them. It wasn't that long ago that Binance championed the idea of not having a headquarters or central offices but that stance has seemed to change considerably and thus Binance has been awarded the licenses that they need to operate in some countries. That is not to say it is all going perfectly as today has shown to be the case.
Today it was announced that Binance was fined $3.4 million by the Dutch central bank for operating illegally. While that might not sound that bad the issue is the central bank declared it a category 3 fine which is the worst level. With a category 3 fine, the upper limit is still pretty low with a 2-4 million euro fine, and since the euro is almost even with the USD a $2-4 million fine.
This fine or possibility of it first came to light in August 2021 when the central bank warned Binance that it had offered crypto services in the country without approval. Based on what has come out this warning did not stop Binance either as the "breach" as they are calling it spanned from May 21, 2020, to at least December 1, 2021 months past the August 2021 warning. After the appeal, the fine was lowered by 5% because Binance applied for registration and was pretty cooperative about its operations during the process. To me sounds like knew their activities were in a grey area and rather than ask and address them they continued to operate till they were warned and then it took time to wind down their operations.
It will be interesting to see how this affects their ability to get the licenses that they need. On one hand, the fine was lowered because they applied but on the other, the central bank still designated it the most severe of fines. It seems to me they are trying to keep their options open with this and by playing both hands if Binance provides and does everything that the regulators want they will be rewarded with the license however if they do not they can highlight this as the reason why it was denied.
Coinbase News
There is not only bad news on the European Crypto front though as COINBASE just received its Crypto Asset Service Provider approval from Italy's Anti Money Laundering regulator. What is a little interesting about this though is that Coinbase has long operated in Italy and has even offered its Coinbase card services in Italy since June of 2019!
Reading between the lines it seems that this was done for a couple of reasons. The first one is that working with the anti-money laundering authorities in a country is always going to be a good look for a centralized crypto company like Coinbase. Since crypto has long been accused of being a facilitator of money laundering this allows Coinbase to show that it does not play a part in this behavior. The other big reason seems to be that it will allow them to offer not only the services that they currently do but more importantly future new products. While I have no idea what types of products Coinbase could be looking at offering in a bear market like crypto is currently in you do not want to cut off any future revenue streams which this will help avoid.
While Coinbase currently operates in almost 40 countries in Europe this has been done through only 3 countries with dedicated hubs. Coinbase late last month stated that it was looking to register in more countries and thus launch more hubs including Italy, Spain, France, and the Netherlands (which is who just fined Binance). If Coinbase can continue to expand and get approval in more and more countries I think that it will not only help the company's stock price but also allow it to fight back against Binance in its own backyard. This competition will be key for all parties both the companies and the consumers in helping create a much more level playing field and one that really lowers the barrier to entry for those across the world.
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