After failing to obtain European Mica approval in time, Binance’s services were discontinued in several European countries, including France, where Binance served 2 million customers.
As of Wednesday, July 1, the world’s largest stock exchange is no longer authorized to serve several European countries, including France, due to its failure to obtain European Mica approval (for “Crypto Asset Markets”). A few days before this deadline, Binance sent out an email to its customers with instructions for them to follow.
While ensuring that their funds remained “safe”, Binance nevertheless invited its users to transfer their cryptocurrencies to a regulated player Mica or to a cold crypto wallet. From Wednesday, its services are limited to withdrawing user funds. Its clients can no longer trade, although the platform has built its reputation on this type of trading, especially using leverage.
Let us remind you that crypto companies had to receive approval from European Mica before July 1. However, of the approximately 5,000 crypto companies that have so far served European clients, only 240 are still allowed to operate. In France, only 24 companies managed to win the European ticket.
Even if Binance claims to be looking for Mica in other parts of Europe, its limited access is leading to a redistribution of cards.
“We are seeing clients leaving Binance to create accounts on Coinhouse to continue their trading activities. All of this should benefit the European market as the platforms offer better protection to European clients,” explains Yoann Bryant, Secretary General and Director of Compliance and Risk at Coinhouse (a French Mica-approved cryptocurrency exchange, editor’s note).
“Binanciens” and “Binanciens” no longer have that atmosphere. “Because I work in the ecosystem, I was on deadline and saw that Binance failed to get Mica approved. So we were more or less expecting an announcement. Personally, I still thought they would end up finding a solution at the last minute… but that wasn’t the case,” explains Carlita Crypto, who opened an account with Binance in 2021.
“I could leave my funds on Binance while I wait for them to get approved, but the problem is that from then on we can’t really touch them; only withdrawals are available. But I want to be able to maintain control of my cryptocurrencies and quickly exchange them if necessary. So I’ve already moved them elsewhere,” she explains.
“I repatriated my cryptocurrencies without waiting for the last minute”
It’s the same story with Julien, who is in charge of the CryptoBoost website.
“I repatriated my cryptocurrencies last weekend without waiting until the last minute. When a platform loses approval in your jurisdiction, you don’t leave your funds waiting, hoping they’ll come back. You act early,” he says.
A person who opened an account on Binance in 2017 decided to transfer his funds to a “major” regulated US player Mica, which he considers “healthier” in the current context.
“And for everything I want to keep in the long term, the reflex remains in the personal wallet, on self-sufficiency. This is the real lesson of all cycles: neither your keys, nor your coins,” he elaborates.
However, the crypto giant does not actually advise its users to transfer their funds anywhere else, which it regrets. “Technically it’s easy if you’re used to it, but for someone just starting out, withdrawing cryptocurrency to a wallet or other platform can quickly become intimidating,” he continues. We’ve prepared a practical guide to transferring your funds from a crypto platform like Binance to a crypto wallet, which you can check out here.
“You’re on your own.”
“You are told that you will be able to get your funds back, so you will be able to do it alone. This is the problem with the general public: those who are not technically comfortable are left to their own devices when faced with deadlines,” he laments.
While Carlita, Julien and others have taken off, others still believe in Binance, considering themselves “encouraged” by Binance’s current messages. When we see movement on the blockchain, withdrawal flows from Binance remain “relatively moderate,” Cryptoast media estimates. Over the month, we saw $1.6 billion worth of outflows… a drop in the bucket compared to the $114 billion in crypto still managed by the platform.
“Binance insisted that the situation was temporary and that the platform intended to quickly return with the Mica license in its pocket,” explains Cryptoast.
These clients hope that one day the cryptocurrency exchange will receive Mica’s approval and therefore reopen. But this means agreeing to no longer trade and therefore allowing your cryptocurrencies to be stored on a centralized platform… at the risk of one day going bankrupt. Let us remind you that in 2022, the world’s second largest crypto exchange FTX went bankrupt in a short time.
“We’re in two different situations,” frets Coinhouse’s Yoann Bryant. FTX was an earthquake “due to mismanagement, lack of transparency, genre confusion and fraudulent practices. The current situation around Binance is fundamentally different. Withdrawals of funds today are massive, but still limited. We are far from a mass exodus, but there has not been a real exodus of clients from the Binance platform at the moment,” he concludes.