Is Binance legal?
Binance is not legal everywhere in the world: in this article, we will discuss what determines whether Binance is legal and whether you can use Binance without any problems.
Binance is not legal everywhere
Binance operates legally when they comply with local laws and regulations. This is not the case in Europe: here, they do not comply with the Law on the Prevention of Money Laundering and Terrorist Financing. Within Europe, all financial services must collect sufficient information about customers to prevent accounts from being used for illegal purposes.
Research shows that of all crypto transactions, around 0.34% are used for illegal purposes. Of course, governments would like to see this percentage drop to 0%: the anonymous and cross-border nature of cryptocurrencies makes it easy to launder money.
It is therefore mandatory for crypto exchanges to execute checks. Users of the platform must identify themselves so that it is always clear who is using their financial services.
Are you an illegal customer?
In most cases, you are not illegal as a customer: you can therefore continue to use Binance. However, there can be disadvantages to investing with an ‘illegal’ crypto exchange. In Europe, for example, it has become a lot more difficult to have fiat balances paid into a bank account.
What does Binance do?
Binance is in the process of implementing the required changes. In the future, Binance will probably comply with local laws again, which would make the crypto exchange legal.
Is Binance illegal everywhere?
The legal status of Binance varies by region. In some regions, such as China, cryptocurrencies are illegal. In other regions, the laws are not strict and there is no supervision, which makes Binance legal. Therefore, always research the status of crypto and Binance in your own region.
There are also several lawsuits currently pending against Binance. For example, Binance was indicted for money laundering in 2021 in the USA. There are also various regulators such as those of Japan and Italy that banned Binance. It seems Binance is facing quite some challenges, I am curious to see how the company manages to protect its reputation in the future!