MEXC’s crypto services not authorized in Germany, BaFin warns

Germany’s Federal Financial Supervisory Authority (BaFin) has issued a warning to consumers about cryptocurrency exchange MEXC.

MEXC is one of the largest cryptocurrency exchanges in the world, with a daily trading volume of over $10 billion. The platform is allegedly providing financial services in Germany without the necessary authorization from BaFin.

Specifically, MEXC’s crypto custody services require BaFin’s authorization. BaFin explained on its website that financial services can only be offered in Germany by companies that have the requisite authorization.

MEXC is a centralized cryptocurrency exchange that was founded in 2018. It is headquartered in Singapore and has offices in a number of other countries, including Estonia, Australia, and the United States. MEXC offers a wide range of services, including spot trading, margin trading, futures trading, and staking. It also has a number of unique features, such as a launchpad for new cryptocurrency projects and a copy trading platform.

Furthermore, this isn’t the first regulatory hurdle for MEXC. In April, the Financial Services Agency of Japan also issued a warning stating that MEXC Global was operating in Japan without the necessary registration. At the time, the FSA ordered MEXC Global alongside Bybit, Bitforex, and Bitget to cease offering services to Japanese residents.

To encourage regulated business within the crypto industry, Germany adopts a licensing scheme for digital assets services after the amendment it introduced two years ago to the EU’s Money Laundering Directive.

Any business wishing to offer cryptocurrency services in Germany must first seek approval from the Federal Financial Supervisory Authority, also known as BaFin. US popular exchange Coinbase was the first crypto native startup to be approved by the BaFin in 2021, followed by the Berlin-based financial technology firm Upvest.

Meanwhile, the introduction of MiCA provides a unified regulatory framework for cryptocurrencies and digital assets across EU member states, potentially complicating the approval process for Binance and other crypto-related entities operating in the region.

Earlier in June, German financial regulatory authority told Binance that it will not issue a digital asset custody license to the world’s largest cryptocurrency exchange. The exact nature of this denial, whether it was a formal ruling or a communicated intention during ongoing discussions, has not been clarified.