CZ Breaks Silence on Why Binance’s EU Crypto License Fell Apart

TLDR

• EU’s MiCA crypto rules take effect July 1, requiring exchanges to hold a Crypto-Asset Service Provider license to operate in the bloc.
• Binance withdrew its MiCA application in Greece last week and will restrict EU services; Bybit Global is also limiting EEA access starting July 1.
• Licensed exchanges including Coinbase, OKX and Kraken are offering deposit bonuses and prize draws to attract users leaving unlicensed platforms.
• Binance founder Changpeng “CZ” Zhao said the Greek application was compliant and close to approval before unnamed political forces intervened.
• CZ also said he still does not fully understand Strategy’s STRC preferred stock product, calling it “over-engineered.”

New European Union rules for cryptocurrency companies take effect on July 1. The rules, known as Markets in Crypto-Assets, or MiCA, require any company offering crypto services in the 27-country bloc to hold a license called a Crypto-Asset Service Provider authorization.

As of Monday, regulators across EU member states had approved 244 of these licenses. Germany’s financial authority, BaFin, issued the most, with 57 approvals. Regulators in Greece, Hungary, Poland, Portugal and Romania had not issued any licenses as of Friday.

Exchanges Compete for Departing Users

Binance, the world’s largest crypto exchange, withdrew its MiCA application last week. The company said it will restrict services for EU-based users starting Tuesday.

Bybit Global also said its access for users in the European Economic Area will be limited starting July 1. Its separate Bybit EU arm holds an Austrian license and can keep operating.

Exchanges that already hold MiCA licenses are using the moment to attract new customers. OKX Europe CEO Erald Ghoos said Monday the exchange will offer an 8% return on new deposits for users moving from Binance or Bybit.

Coinbase CEO Brian Armstrong said Friday that his company will offer a 5% transfer bonus for users who switch before July 13. Kraken, which also holds a MiCA license, is running a $1.1 million prize draw tied to euro deposits.

Binance Founder Defends Greek Application

Binance founder Changpeng Zhao spoke about the withdrawal during an interview with The Block. He said the company’s application in Greece met all requirements and was close to being approved by at least one regulator.

Zhao said two EU countries wanted to host Binance’s license, leading to what he described as a bidding war. He said other unnamed forces worked against the approval.

There has been speculation that European Central Bank President Christine Lagarde played a role in blocking the application. Zhao did not confirm or deny this, saying he had seen the same claims online but had no documents to support them.

Binance co-CEO Richard Teng said the company plans to pursue a license in a different EU country within the coming months. Zhao compared the situation to Binance’s past regulatory struggles in Japan and Singapore, both of which the company later resolved.

While Bybit pulls back in Europe, the company said it is expanding in the Middle East and North Africa. A company executive said at an event in Tel Aviv on Sunday that Bybit is building products tailored to that region’s customers.

During the same interview, Zhao discussed Strategy’s STRC preferred stock. He said he has tried multiple times to understand the product and still does not fully grasp it.

Zhao called many of these financial products “over-engineered.” He said using Bitcoin as collateral creates tension because the asset’s price swings make it hard to use as a stable base.

Strategy announced changes to the product on Monday, including a higher dividend rate of 12% and a $1 billion buyback program, according to The Block. Zhao said he does not doubt Strategy chairman Michael Saylor’s intentions, calling him a longtime Bitcoin supporter.

Zhao also disclosed he has donated $2 million to a nonprofit that helps former prisoners reenter society. The deadline for exchanges to comply with MiCA arrives Tuesday, with Spain’s regulator confirming there will be no extensions.

The post CZ Breaks Silence on Why Binance’s EU Crypto License Fell Apart appeared first on CoinCentral.