Binance to end futures and derivatives product offerings in Europe

·3-min read
Malaysia's Securities Commission has ordered Binance to disable its website and mobile apps in the country within two weeks. Photo: Reuters
Malaysia's Securities Commission has ordered Binance to disable its website and mobile apps in the country within two weeks. Photo: Reuters

Binance, one of the world’s top cryptocurrency exchanges, announced its plans to wrap up its futures and derivatives products offering across Europe as it reels from regulatory woes.

The move will start from Germany, Italy and the Netherlands.

“With immediate effect, users from these countries will not be able to open new futures or derivatives products accounts. With effect from a later date to be announced in a further notice, users from these countries will have 90 days to close their open positions,” the Cayman Islands-registered firm exchange said.

It clarified it does not actively market futures and derivatives products locally but wants to start further scaling down access to those products in the region.

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“As the crypto ecosystem evolves globally, we are continually evaluating our products and working with our partners to meet our users’ needs,” it added.

Going into more detail about the decision on Twitter, it said the European region is a very important market for the company, and it is taking steps "towards harmonizing crypto regulations, which is a positive sign for the industry."

Binance has been under much pressure lately as regulators around the world crack down on cryptocurrencies and exchanges.

Read more: The rise of cryptocurrency exchanges

Its decision "seems like a preemptive move, aiming to front run the inevitable clamp down by regulators," Kaia Parv, head of investment research at Fx Primus, told Yahoo Finance UK.

"FCA’s blunt decision in June to ban Binance’s UK business has sent a clear signal to crypto exchanges that the central banks and regulators are keeping an eye on the digital markets."

Last month, the UK's Financial Conduct Authority ordered Binance to remove all advertising and financial promotions.

The company was required to make clear that it is no longer permitted to operate in the UK, and must not carry out any regulated activities in Britain without prior consent.

On Friday, Malaysia's Securities Commission ordered it to disable its website and mobile apps in the country within two weeks.

The commission said Binance is "illegally operating a digital asset exchange" and has issued "a public reprimand against Binance for continuing to operate illegally in Malaysia despite being included in the SC’s Investor Alert List in July 2020."

“Binance is under excruciating pressure from regulators and needs to ensure they align appropriately or risk creating even greater compliance and brand risks within Europe," Eric Schiffer, CEO of private equity firm The Patriarch Organization, said.

Exchanges form a key part of the cryptocurrency landscape. Today, the top five crypto exchanges in order of trading volume are Binance, Huobi Global, Coinbase, Kraken, and FTX. Each of them turns over billions of dollars in trade each day.

Watch: What are the risks of investing in cryptocurrency?

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