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Binance’s attempt to acquire a pan-European crypto license from Greece came under scrutiny when the Wall Street Journal reported that European Central Bank President Christine Lagarde had urged Greek Prime Minister Kyriakos Mitsotakis not to approve Binance’s MiCA application.
According to Greek officials, the report claimed that Binance was close to announcing authorization by late May, with its application complete.
The company had given a pre-prepared statement, describing approval as a “Major Milestone,” and co-CEO Richard Teng was expected to travel to Athens. Lagarde, the ECB and Greece’s Hellenic Capital Market Commission have not confirmed or denied the intervention publicly.
Under the MiCA framework, crypto-asset service provider licenses are not issued by the ECB at the EU level but by the national skilled authorities. The European Securities and Markets Authority promotes supervisory convergence.
According to the Wall Street Journal, Lagarde was concerned about Binance’s compliance record, and broadly about the risks of dollar-pegged stablecoins expanding into the European market. In 2023, Binance pleaded guilty to Bank Secrecy Act violations, money transmission violations, and sanctions violations in the United States, and was fined over $4 billion.
In May, Lagarde explained that more than $300 billion in stablecoins were in circulation. Almost all were denominated in US dollars and were issued by leading operators Tether and Circle. The issue of stablecoins was also becoming a policy issue for the ECB.
She notes a threat of “digital dollarisation” and loss of monetary sovereignty if stablecoins are issued in foreign currencies, but did not call for a ban on stablecoins, arguing instead for the establishment of European settlement infrastructure based on central bank money.
Binance has maintained that Greece’s filing was MiCA compliant, and in June, the exchange said it understood the HCMC reviewed the application, found it compliant, and that the application had also been reviewed at the ESMA level. The Greek regulator failed to issue an approval decision.
According to Reuters, officials expected Greece to reject the application. On 16 June, Binance said that it had not received an indication to this effect from the Greek authorities.
However, before the HCMC had the chance to make a decision on the application, Binance withdrew it on 24 June, saying that it would apply for authorization in another EU member state due to the Greek application status and the EU transition deadline.
Similarly, a single MiCA authorization by an EU member state will allow the crypto-asset service provider to provide the covered services in the other EU member states. Following the withdrawal of its application in Greece, Binance did not announce a replacement MiCA authorization.
The episode comes as EU officials have debated whether ESMA should have direct supervisory powers over the largest crypto companies, or whether national regulators should grant the licenses, which is the status quo. This would require a change in legislation, which presently has not been adopted across the EU.
Source: <a href="https://<a href="https://xpertsstudio.com/ether-and-xrp-etfs-see-outflows-as-bitcoin-reclaims-77k/” title=”Ether and XRP ETFs See Outflows as Bitcoin Reclaims $77K”>bitcoinfoundation.org/news/crypto-exchanges/binances-eu-crypto-license-bid-faces-fresh-scrutiny-after-reported-lagarde-intervention/” target=”_blank” rel=”nofollow noopener”>bitcoinfoundation.org