Binance Faces Fresh Hurdles in Their Expansion to Spain
Binance’s expansion plans have met new challenges after Spain’s regulators asked the exchange to reduce its derivatives offerings. On Friday, the National Securities Market Commission told the globe’s largest trading platform to limit its derivatives services in the nation.
Derivative trading is the speculation of the potential value of an underlying asset through the selling and purchasing of contracts to achieve profits. Derivatives are official financial contracts between parties based on an asset that grants the investor the power to purchase and sell an asset.
The move comes after the globe’s largest exchange got regulatory approval to offer its services in France. Binance will resort to using France as its European headquarters, given the circumstances.
Binance’s Expansion met with Increasing Regulatory Scrutiny
The latest news from Spain’s CNMV shows that Binance is yet to win the hearts of regulators in the region. It shows the hesitance of Spain to open its doors to the exchange following Binance’s regulatory crisis in 2021.
Binance has not had smooth sailing in terms of adhering to national laws. The exchange faced so much scrutiny from global monetary regulatory units, especially the U.K. and the United States last year, over its non-physical location and breach of trading protocols. Like Spain, the exchange was forced to limit its derivatives offerings in a Canadian province.
The E.U. was also alerted. Recently, the bloc voted to enforce laws that will ban decentralized wallets and require crypto traders and platforms to report all transactions.
Although Spain’s apprehensiveness to grant Binance regulatory approval is a heavy blow, it won’t have a lasting effect on the exchange’s expansion plans into Europe. Currently, the exchange is complying with all regulatory requirements to win the regulator’s approval. Binance was among the first to comply with economic blockades against Russia over the Ukraine invasion.
As of this writing, Binance has taken down any form of derivatives offerings from its Spanish site. However, its contract holders will continue to hold onto their positions.
Reports from Spain disclose that the CNMV’s disapproval of derivatives offerings was borne out of concern for investors. The body understands the gravity of losses investors could incur when exposed to the product offering and opted to move against it. The body cited similar concerns last year.
Binance still awaits a cryptocurrency license from the Bank of Spain – one that the exchange had applied for early last year. Meanwhile, others like Bit2Me have already been approved to operate in the jurisdiction.
Not a Bad Period for Binance
Binance may have had a rough patch with regulators, but it hasn’t hindered its expansion plans. Recently, the exchange got regulatory approval to operate in Bahrain after a month of agreeing in principle with the government.
The cryptocurrency firm also expanded into the Thailand market and Indonesia, alongside launched a customer service support in Turkey.