Recent Moves By Binance Spell Potential Trouble For The Entire Industry
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June 1, 2023 9:37 am
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A recent announcement from Binance, the world’s most popular cryptocurrency exchange, could potentially spell trouble for the entire crypto industry and the market.
As part of an effort to comply with recent crypto regulations in the European Union and the new MICA framework, Binance will be delisting several coins and crypto assets.
According to a recent press release from the exchange, a decision has been made to delist 12 tokens and coins in Italy, Poland, France, and Spain.
The coins are mainly privacy and anonymity tokens; the list includes Decred, Dash, ZEC, Horizen, PIVX, Navcoin, Secret, Verge, Firo, beam, XMR (Monero), and MobileCoin.
The Modern Investor dissected the current round of Binance delistings:
One crypto influencer known as Ninja Cat also warns Binance users that the world’s most popular crypto exchange is also delisting and updating LUNC futures and updating its margin and leverage policies for several crypto assets.
#NinjaCat warning to #LUNC holders ⚠️
Expect yet another sell-off event as@binance is going to be liquidating all LUNC futures trades by 6 June and delist the perpetual futures contract.
Binance accounts for the largest trading volume of $LUNC.
Something is up. And it's not… pic.twitter.com/cwn5NfwFHW
— #🅽🅸🅽🅹🅰 🅲🅰🆃 (@0xNinjaCat) June 1, 2023
CryptoSlate provided this statement from a Binance spokesperson:
A spokesperson for the crypto exchange told CryptoSlate that the exchange’s decision complied with “local laws and regulations regarding the trading of privacy coin.”
It added that the decision was made “to ensure we can continue serving as many users as possible.”
Electric Coin Co had this to say about the delisting and its effect on those who use these coins and services.
ECC doesn’t know the precise reasoning for the delisting — as far as we know, we weren’t contacted by Binance — but we assume it’s due to regulatory pressure in the EU and the formal signing of the Markets in Crypto Assets (MiCA) regulation.
— Electric Coin Co. (@ElectricCoinCo) May 31, 2023
MiCA language is vague and could apply to a wide range of companies, decentralized organizations, cryptocurrencies, and applications. What is a “crypto-asset service provider,” for example? Does Bitcoin have an “inbuilt anonymisation function”?
— Electric Coin Co. (@ElectricCoinCo) May 31, 2023
The Cryptonomist explains:
The AML (Anti Money Laundering) rules require exchanges to verify that there is no serious suspicion that the funds they receive are from illicit or money laundering activities.
These are also supplemented by rules against terrorist financing, which follow similar procedures.
In these cases the exchange is required to verify the source of the funds, and with privacy coins this can be impossible or otherwise too difficult.
These reasons prompted Binance to choose to delist privacy coins in those countries where regulations in this regard are more stringent, or where it is not convenient for it to invest large resources to try to remain compliant with regulations.
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