Digital

Crypto.com Receives Dutch Central Bank’s Approval Amidst Binance’s Compliance Woes

Picture Source: BeInCrypto

In the dynamic world of cryptocurrency, regulatory compliance has become a critical factor for exchanges seeking to operate in various regions. Recently, Crypto.com, a prominent crypto exchange, secured a major victory as it obtained approval from De Nederlandsche Bank, the central bank of the Netherlands, to provide crypto services to Dutch citizens. This approval came shortly after Binance, one of its main competitors, faced challenges in meeting local compliance requirements.

Dutch Central Bank’s Compliance Review

The Dutch central bank meticulously reviewed Crypto.com’s operations to assess its adherence to Dutch anti-money laundering and anti-terrorism financing laws. Successfully passing this compliance review was a significant milestone for Crypto.com, as it positions the exchange to leverage opportunities offered by the upcoming Europe’s Markets-in-Crypto-Assets bill (MiCA), scheduled to take effect in 2024. MiCA will allow service providers approved in one EU region to conduct business across all 27 member states, creating a vast market for Crypto.com’s services within the European Union.

Expanding European Footprint

With the Dutch license secured, Crypto.com is now in a prime position to operate across the entire European Union once MiCA comes into force in late 2024. This provides the exchange with access to a potential customer base of over 446 million people across the EU. However, the landscape is already competitive, with 36 other crypto companies already holding licenses from the Dutch central bank. Major players such as Coinbase Europe, OKCoin, eToro, and BitStamp have already established themselves in the European market.

Comparing Trading Volumes

Statista, a leading data provider, reported that as of January 10, 2023, Coinbase accounted for 3% of the global trading volume. In contrast, Crypto.com processed only 0.6% of the global trading volume in the same period. This represented a decline from the 3.3% share it held in December 2021. While Crypto.com still has room for growth, it faces the challenge of competing with larger and more established players.

Binance Faces Hurdles

On the other hand, Binance, known for being the largest exchange by trading volume, has encountered difficulties in meeting compliance requirements. After failing the Dutch regulator’s review, Binance had to exit the Dutch market. It transferred its clients to a local rival, Coinmerce, which has been operating with a crypto business license in the Netherlands since November 2020.

Despite withdrawing its license application with Germany’s finance watchdog, BaFin, Binance managed to secure licenses and approvals from regulators in several other EU countries, including France, Lithuania, Poland, Spain, Sweden, and Italy, ahead of MiCA. Nevertheless, operational challenges may arise as a payment partner recently terminated a deal for processing euro deposits and withdrawals. Additionally, French authorities are investigating charges of aggravated money laundering related to Binance’s activities, further complicating its position in the European market.

Read More: Why Dorian Nakamoto’s Connection to Bitcoin Founder Remains Unlikely

Conclusion

Crypto.com’s successful approval from the Dutch central bank and its forthcoming expansion across the EU demonstrate the growing significance of regulatory compliance in the cryptocurrency industry. As Europe prepares to implement the MiCA framework, exchanges will be required to navigate a complex landscape of regulations to maintain their presence and offer services to European citizens. Meanwhile, Binance’s struggles highlight the challenges that exchanges may face when dealing with varying regulatory requirements in different jurisdictions. The evolving regulatory environment will continue to shape the competitive landscape of crypto exchanges in Europe and beyond.

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