Germany's Federal Financial Supervisory Authority (BaFin) reportedly advised cryptocurrency exchange Binance to withdraw its license application due to concerns regarding the company's CEO, Changpeng Zhao (CZ), and the company's structure. BaFin expressed doubts that C Z may have failed the "fit and proper person" test under their regulatory guidelines, which require managing directors to have the necessary professional qualifications, a good reputation, and sufficient time for their functions.
Furthermore, BaFin raised concerns about Binance's corporate structure, stating that it hinders effective regulation. Binance had previously announced on July 26 that it withdrew its application in Germany, citing its commitment to comply with the European Union Market for Cryptoassets (MiCA) framework. However , a Binance spokesperson refused the Wall Street Journal's report, claiming it was inaccurate. As of press time, the exchange had not addressed the specific details regarding CZ.
Binance is currently facing legal action in the United States from both the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for alleged violations of securities laws and trading guidelines. The exchange's lawyers filed a motion on July 27 to dismiss the CFTC's lawsuit, arguing that the commission exceeded its authority. While there have been no criminal charges as of press time, there are reports suggesting that the US Department of Justice (DoJ) is investigating Binance for potential violations of US sanctions against Russian entities .
Binance has grown to become one of the world's largest cryptocurrency exchanges but lacks a physical headquarters. Reports indicate that CZ has been based in Dubai since 2021, making it difficult for the SEC to issue a legal subpoena to the CEO in June. In June response to The investigation by the Justice Department, Binance's Chief Strategy Officer Patrick Hillmann announced his departure from the company on July 6.
