Key Highlights
- OKX CEO Star Xu challenged Binance’s claim that Europe lost after its failed MiCA licensing effort.
- Xu accused Binance of shifting blame instead of addressing compliance and AML shortcomings.
- CZ argued Binance was previously considered “fully compliant” before factors blocked approval.
Star Xu, founder and CEO of OKX, has criticized Binance founder Changpeng Zhao (CZ) for attempting to frame Binance’s failed MiCA licensing effort in the European Union as a “loss for Europe.”
In an X post on Monday, Star Xu pushed back, stating, “What a huge loss? A loss for whom—European regulators or the people of Europe? What exactly did Europeans lose? Another October 11?” He was referencing Binance’s past regulatory challenges, including the high-profile events of October 2023 that affected users and trust in the industry.
Xu also cited public reports stating that Binance failed to demonstrate effective AML (anti-money laundering), sanctions compliance, and market integrity programs to the satisfaction of regulators, ultimately leading to the withdrawal of its application without obtaining a license.
Xu argued that, instead of internal reflection on these shortcomings, Binance chose to portray Europe as the loser. “That says a great deal about the company’s attitude toward the rule of law and financial regulation,” he added.
What narrative did CZ set?
CZ had described Binance’s withdrawal from the MiCA application process as both a “loss for Binance” and “a loss for Europe,” claiming the application was once deemed “fully compliant” and that two EU countries engaged in a “bidding war” to host the exchange.
He suggested political “other forces” ultimately blocked approval, calling the outcome a lose-lose situation. CZ also emphasized Binance’s efforts to work with regulators globally while noting the company remains one of the most scrutinized yet compliant platforms.
Binance to Halt EU crypto services from July 1
Binance will suspend crypto services for customers across the European Union starting July 1 after failing to secure a license under the bloc’s Markets in Crypto-Assets (MiCA) regime. From July 1, all crypto firms serving the EU must hold a MiCA license from a member state’s regulator to operate legally. A single national license can be passported across the 27-nation bloc.
The exchange had pursued authorization through Greece for roughly 18 months but withdrew its application on June 24, just days after reports emerged that Greek regulators were set to reject it. Binance described the withdrawal as a “prudent decision” and said it would seek authorization in another EU member state.
Xu’s criticism of Binance’s communication strategy
Star Xu has also previously criticized Binance, questioning its communication strategy around European regulatory setbacks. In response to concerns raised on X, Xu said credibility in financial services stems from transparency and accurate information, not narrative control.
This marks the latest in a series of sharp exchanges. Earlier on June 25, Xu referenced Binance’s past regulatory troubles, including its 2022 clashes with the UK’s Financial Conduct Authority (FCA).
Xu argued that the real issue goes beyond obtaining licenses or expanding compliance teams. According to him, the fundamental challenge lies in whether compliance is genuinely embedded in a company’s culture and core decision-making processes.
Xu’s comments ignite fresh debate
The exchange of words highlights ongoing tensions and competition among major centralized exchanges as the EU’s MiCA framework, designed to bring regulatory clarity and consumer protection to crypto markets, rolls out.
MiCA sets strict standards for licensing, governance, reserves, and operational resilience. Obtaining a MiCA license is seen as a passport for operating across the EU’s 27 member states, making it a critical milestone for large platforms.
Binance’s withdrawal comes after years of regulatory scrutiny worldwide. While CZ maintained the firm’s commitment to compliance and expressed hope to resolve the situation soon, critics argue that the narrative shifts blame away from operational and compliance gaps.
Xu’s response underscores a broader industry debate: whether major exchanges are truly prioritizing regulatory adherence or seeking favorable interpretations to maintain market dominance.
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