As Binance continues to be the main target of global regulators around the world, the crypto exchange has made a series of decisions in order to comply with regulation, the latest of which has seen Binance make the decision to ban crypto derivatives trading in Europe.
Currently, only three countries - Germany, Italy, and the Netherlands wil be unable to access derivative trading services via the Binance platform. However, Binance has also stated that they will be winding down their crypto derivatives trading across Europe in the future.
Binance announced via Twitter that they would be halting their derivatives products offerings on Friday:
“We're continually evaluating our products and working with our partners to meet our users’ needs. Today we’re announcing that we plan to wind down our derivatives products offerings across the European region, commencing with the Netherlands, Germany, and Italy.”
While the high appetite for derivative trading of cryptocurrencies, the equally high-risk nature of derivative trading has faced much backlash from regulators. In the UK, the financial watchdog has banned derivatives trading for retail traders due to the high-risk involved in these. Similarly, on the same day, Binance made the decision to stop operating in Ontario after a number of exchanges were handed notices for failing to comply with regulation there.
As the exchange faces increasing pressure from regulators, any high-risk or unregulated aspects of their business has been the focus of their efforts to remain compliant. Along with limiting crypto derivatives trading, Binance recently made the decision to stop cryptocurrency margin trading with the Australian Dollar, Euro And Pound.
The worldwide crackdown on Binance has led to the CEO Changpeng Zhao “CZ” considering moving the company into a more regulatory-friendly area that focuses on compliance. The Binance CEO noted that the decentralized nature of the exchange will have to move into a position where it has a "very strong regulatory background."
Binance may be facing a number of regulatory battles at the moment, but as countries continue to shape and strengthen their regulatory positions, the likelihood is that these legal skirmishes will increase in frequency to include other crypto companies who may also be forced to change the nature of their offerings if they are to survive.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.