Zhao Changpeng, chief executive officer of Binance, speaks during a Bloomberg Television interview … [+]
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Binance, the world’s largest crypto exchange by trading volume, is starting to cease its futures and derivatives offerings throughout Europe as regulators around the world zero-in on the exchange.
As of today, Binance clients in Germany, Italy, and the Netherlands will no longer be able to open new futures or derivatives product accounts. Users in these countries have 90 days, from a date yet to be announced, to close their open positions.
This action follows a similar announcement on Monday by the exchange to stop offering cryptocurrency margin trading with the Australian dollar, euro, and sterling. Earlier in July Binance also dropped support for tokenized stocks.
Today’s decision comes as regulators in the United Kingdom, Canada, Japan, Singapore, and Italy, among others, have issued warnings about the exchange’s legal status in their respective countries. Earlier this month Thailand’s Securities and Exchange Commission also filed a criminal complaint against Binance for operating a digital asset business without a license.
The question now becomes whether Binance can keep its impressive market share while operating under increased regulatory scrutiny.
The four year-old exchange boasts an expansive suite of products for a company founded only four years ago. Offerings include its core exchange product, institutional services, a decentralized exchange built on its own Binance Smart Chain, a host of trading services, derivatives products, a freshly launched NFT marketplace, and more.
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It has created local affiliates in jurisdictions with special regulations such as the U.S. and Singapore, and its CEO Changpeng Zhao has recently stated that it might be better for the exchange to have a new leader moving forward.
However, while these actions may help the exchange stay on the right side of the law, they could threaten its ability to scale and innovate. Additionally, these local franchises may start to move in their own directions as they cater to their specific markets.
For instance, under its new CEO Brian Brooks, Binance.US is increasingly asserting its independence and recently noted in an exclusive interview with Forbes that a rebrand may be necessary.
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Author: Emily Mason, Contributor