Regulation
Binance Complies with MiCA Regulations and Restricts Unauthorized Stablecoins in the EU
Binance, the world’s largest cryptocurrency exchange by trading volume, recently announced significant operational changes in response to upcoming regulations in the European Union.
The exchange is expected to limit access to stablecoins deemed unregulated by the EU’s new Markets in Crypto-Asset Regulation (MiCA), which comes into force at the end of June.
Binance Implements Phased Approach to MiCA Compliance
The implementation of MiCA represents a substantial shift towards stricter oversight within the stablecoin sector. A key element of MiCA is the licensing requirement for stablecoin issuers, requiring them to obtain approval from the relevant EU authorities.
This regulation also requires issuers to adhere to several operational protocols, including the approval of a “white paper” by national regulators, maintaining sufficient reserves and ensuring secure custody of the underlying assets.
When asked for details on which stablecoins would be classified as “unregulated” and therefore affected by these restrictions, Binance did not provide an immediate response.
To comply with upcoming regulatory changes, Binance has outlined a phased approach to managing the transition. Users holding “unsanctioned” stablecoins will have the option to convert their holdings to other digital assets such as bitcoin, ether, regulated stablecoins, or fiat currency. As of June 30, the purchase of “unauthorized” stablecoins will no longer be possible in Europe.
Binance Announces EEA Service Changes to Comply with MiCA
The company also announced several changes to its services in the EEA, which will also come into effect at the end of June. Rewards from campaigns and referrals will be distributed in the form of regulated stablecoins, BNB or other non-stable tokens.
Copy exchange for EEA users will be discontinued from June 29 at 8:59 p.m. UTC. New borrowing of unauthorized stablecoins will be prohibited and EEA users will no longer have access to the FDUSD pool on Binance Launchpool. Subscriptions to various services, including Simple Earn, Binance Loans, VP Loans, Dual Investment, Cloud Mining and related offers, will be limited by June 29 at 8:59 p.m. UTC.
These adjustments coincide with the implementation of the MiCA regulation, which aims to strengthen consumer protection and economic stability by imposing rigorous requirements on stablecoin issuers.
The company’s new CEO, Richard Teng, who took over after former CEO Changpeng Zhao was sentenced to four months in prison in April, has worked actively to strengthen the company’s collaboration with regulators. This change is part of Binance’s broader strategy to adapt to the evolving regulatory landscape.
Delisting of crypto assets not meeting industry standards
In a related development, Binance announced that it delete multiple crypto assets, including OmiseGO (OMG), Waves (WAVES), Wrapped NXM (WNXM) and NEM (XEM). The move is part of Binance’s ongoing efforts to ensure that all coins listed on its platform meet specific industry standards.
The exchange evaluates assets based on factors such as project team commitment, trading volume and liquidity, network stability and security, level of public disclosure, and compliance with new regulatory requirements.
The delisting will take effect on May 17 at 03:00 (UTC), and all trading pairs involving these tokens, such as OMG/USDT, WAVES/BTC, WAVES/ETH, WAVES/TRY, WAVES/USDT, WNXM/USDT, and XEM/USDT, will be deleted. Binance will automatically cancel all trade orders involving these tokens after the deadline.
Binance informed its users that those who held the delisted tokens by September 18 could have their holdings automatically converted to stablecoins, although this is not guaranteed. If such a conversion occurs, Binance will notify users before the process is completed. Eligible accounts will receive the equivalent stablecoin value after conversion.
These announcements reflect Binance’s commitment to navigating the complexities of regulatory compliance while continuing to offer robust services to its global user base. As the cryptocurrency industry matures, exchanges like Binance must increasingly adapt to strict regulatory environments, balancing innovation and compliance to maintain market leadership.