Binance has received approval from CySEC to operate as a crypto asset services provider, providing a regulatory stamp for the company’s digital assets and cryptocurrencies business in Cyprus and Europe.
Binance Cyprus Limited has been granted Class 3 registration which allows the world’s largest crypto ecosystem to offer spot, custodian, staking and card services.
The Cypriot licensing requires the firm to adhere to strict financial standards under the MiFID II framework, including the segregation and protection of client funds, full transparency of its business operations and capital adequacy controls.
Operating under the CySEC umbrella allows Binance to leverage its new regulatory profile to expand its services into the European Markets. Launching a service under the CySEC license will also provide users with a regulated platform to work with digital asset-based investments.
Changpeng Zhao (CZ), founder and CEO of Binance, commented: “Binance has some of the most thorough AML and CTF compliance policies in the industry. Recognition of the efforts we have made to be on the leading edge of compliance that our registration in Cyprus represents is testament to that. Effective regulation that protects users and stimulates innovation is essential to the continued growth of our industry.”
Martin Bruncko, Executive Vice President Europe of Binance, added: “Registration in Cyprus is an important step in our European growth and is another sign of our commitment to the region. We look forward to building out our local team in Cyprus and helping to develop the local crypto ecosystem.”
Cyprus introduces regulatory framework for cryptos
The CySEC has been trying to increase oversight of cryptocurrencies and related assets by integrating EU anti-money-laundering rules into the Cypriot laws.
A policy statement issued in 2021 sets out detailed requirements for crypto firms seeking registration in the regulator’s CASP register. This register is publicly accessible and include information such as the crypto firm’s name, the legal form, its address and services.
The policy also introduced a definition for crypto assets that slightly extends beyond its traditional legal status.
Depending on their structure, the Cypriot regulator says crypto assets may qualify as financial instruments under the Investment Services and Activities and Regulated Markets Law. Additionally, while cryptocurrencies cannot be regarded as legal tender, they may qualify as “electronic money” or “e-money” in the sense of the Electronic-Money Directive.
Meanwhile, the CySEC went beyond the requirements set out in the fifth directive as it wants to bring new activities, which are not included in AMLD5, under the AML/CFT obligations.
