The warning comes after authorities in a number of nations issued comments cautioning investors about Binance or alleging the exchange was operating unlawfully.
The Dutch central bank, De Nederlandsche Bank, has issued a warning to Binance Holdings Limited and its subsidiaries offering cryptocurrency services to local consumers. De Nederlandsche Bank stated in a statement Wednesday that Binance was not complying with the country’s Anti-Money Laundering and Anti-Terrorist Funding Act, putting clients at danger of “getting involved in money laundering or terrorist financing.” According to the central bank, Binance is delivering cryptocurrency services and custodial wallets illegally and without the needed legal authorization.
The Dutch central bank stated that it sent the notification to Binance Holdings Limited and organizations “through which Binance delivers crypto services in the Netherlands.” This appears to be the case for the worldwide cryptocurrency exchange as well. Binance confirmed in a statement to Cointelegraph that it is “in the process of submitting an application for the required registration” and “will work constructively” with the central bank to achieve its requirements.
“It is critical to Binance that our users’ interests be protected,” the representative stated. “While we have not yet been officially registered with [De Nederlandsche Bank], we have a sophisticated compliance policy in place that includes tools and procedures to combat money laundering and terrorist financing.”
The warning came after financial regulators in various countries determined that Binance Holdings Limited is not authorized to provide certain services to their citizens. Italy, Malaysia, Poland, Germany, the United Kingdom, the Cayman Islands, Thailand, Canada, Japan, and Singapore have all released comments cautioning investors about Binance or alleging the exchange was operating illegally.
In an Aug. 17 Bloomberg interview, Binance CEO Changpeng Zhao stated that his primary focus was on ensuring the exchange complied with local regulators in its transition to financial institution status, rather than on the exchange’s “day-to-day operations.” Zhao earlier indicated that he would consider appointing “a senior executive with a solid compliance background” to succeed him as CEO.
“We’re transitioning from a technological innovator to a financial services firm, and as such, we need to be fully compliant,” Zhao explained. “I believe that at the moment, all regulators worldwide see cryptocurrencies as financial instruments.” He continued: “We must apply for licenses and it is critical that we speak with regulators regarding their requests for regular meetings during which we provide proactive updates on our activities.”
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