Binance Exits Dutch Market: Changes in Services for Netherlands-based Users
Cryptocurrency exchange Binance has recently announced its decision to halt operations in the Netherlands, citing challenges related to regulatory compliance. In a statement from Binance, the company expressed regret and outlined the details of the service changes:
We regret to announce that Binance is leaving the Dutch market. With immediate effect, no new users residing in the Netherlands will be accepted. Starting from 2023–07–17 at 00:00 UTC (2023–07–17 at 02:00 UTC+2), existing Dutch resident users will only be able to withdraw assets from the Binance platform. No further purchases, trades, or deposits will be possible. We encourage users to take appropriate action by withdrawing assets from their Binance accounts.
The decision to exit the Dutch market comes as Binance faced difficulties in obtaining a virtual asset service provider (VASP) registration from the Dutch regulator. According to the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft), crypto-fiat exchanges and custodian wallet providers, such as Binance, fall under the supervision of De Nederlandsche Bank, or the Dutch National Bank (DNB). In a previous warning issued on 18th August 2021, DNB announced that Binance had been providing crypto services in the Netherlands without the necessary legal registration. The DNB stated that Binance’s operations were in violation of the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme — Wwft) as the exchange was illegally offering services for the exchange between virtual and fiduciary currencies, as well as custodian wallets.
Despite undergoing a comprehensive registration application process, the exchange’s efforts did not result in the desired outcome. Binance expressed its commitment to regulatory compliance and its intention to continue working towards obtaining authorizations to provide products and services to users in the Netherlands:
Binance has been in a comprehensive registration application process as a virtual asset service provider (VASP) with the Dutch regulator. Although we explored many alternative avenues to service Dutch residents in compliance with Dutch regulations, unfortunately this has not resulted in a VASP registration in the Netherlands at this time. Binance will continue striving to obtain authorizations to provide our products and services to users in the Netherlands.
Binance highlighted its compliance with EU standards on the prevention of money laundering and financing of terrorism, as evidenced by its registrations in other EU countries. The exchange aims to fully comply with the new EU rules on crypto-assets (MiCAR). Binance also expressed disappointment in the situation but affirmed its commitment to engaging productively and transparently with Dutch regulators:
While Binance is disappointed that this has become necessary, it will continue to engage productively and transparently with Dutch regulators. Binance is already compliant with EU standards on the prevention of money laundering and financing of terrorism as evidenced by its registrations in other EU countries, including France, Italy, Spain, Poland, Sweden, and Lithuania.
To assist its affected Dutch users, Binance is sending comprehensive emails containing information about the account and asset implications of this decision. Binance aims to facilitate a smooth transition for its users despite the unfortunate circumstances:
Existing Dutch resident users are being sent an email with comprehensive information about what this means for their accounts and any assets they currently have on the Binance platform, alongside any steps they will need to take.
The departure of Binance from the Dutch market underscores the challenges faced by cryptocurrency exchanges in navigating complex regulatory landscapes and reflects the company's commitment to responsible business practices and regulatory compliance. Despite the setback, Binance remains dedicated to working closely with regulators worldwide, aiming to foster a safe and compliant cryptocurrency ecosystem for users. The recent lawsuit by the U.S. Securities and Exchange Commission against Binance and its CEO Changpeng Zhao highlights the increasing scrutiny faced by major players in the industry. As the cryptocurrency industry continues to evolve, exchanges must adapt to regulatory requirements while attempting to strike a balance between innovation and compliance, to ensure a trusted and secure environment for participants.
