German regulator BaFin has reportedly advised Binance, a major crypto exchange, to withdraw its license application due to concerns about its CEO Changpeng Zhao, also known as “CZ,” and the company’s structure.
BaFin’s regulatory guidelines require managing directors like CZ to possess the necessary qualifications, and a good reputation, and dedicate sufficient time to their roles. However, BaFin suggested that CZ may not have passed the “fit and proper” test.
Binance announced on July 26 that it withdrew its application in Germany, citing a focus on compliance with the European Union’s Markets in Crypto-Assets (MiCA) framework. However, the exchange disputed The Wall Street Journal’s report, claiming inaccuracies without providing further details on CZ.
In the United States, Binance is facing legal actions from the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) for alleged violations of securities laws and trading guidelines. Binance’s lawyers have requested the dismissal of the CFTC lawsuit, arguing that the commission exceeded its authority.
Also Read: BaFin Rejects Binance’s Crypto Custody License Application
Despite being one of the world’s largest crypto exchanges, Binance operates without a physical headquarters. CZ is said to have resided in Dubai since 2021, which posed challenges for the SEC to issue a legal summons in June.
