OKX Raise Doubts on Binance’s Regulatory Arbitrage Games Citing Similar Incident in 2022

• Binance’s application for an EU-wide MiCA license through Greece has failed.
• The exchange has until June 30 to secure authorization or begin winding down services.
• OKX founder Star Xu said regulators will judge compliance outcomes, not staffing levels alone.

Binance has pledged to remain in Europe after its attempt to secure an EU-wide operating license through Greece fell apart, leaving the world’s largest crypto exchange with little time to establish another legal route into the bloc.

Gillian Lynch, Binance’s head of Europe and the United Kingdom, said the company was examining other authorization options and would not abandon the market. Under the European Union’s Markets in Crypto-Assets framework, firms must hold approval from one national regulator before serving customers across all 27 member states.

Star Xu Questions Compliance Culture

Meanwhile, OKX founder Star Xu said obtaining a licence or increasing compliance headcount does not prove that regulatory controls work effectively.

In a post on X, Xu argued that compliance must have authority, access to important business activities, and influence over decision-making. He said programs can become procedural exercises when staff cannot challenge sanctions, anti-money laundering, or market-integrity risks.

Xu compared the current situation with Binance’s previous difficulties in Britain. In 2022, the UK Financial Conduct Authority raised concerns after a Binance-linked entity provided financing to Eqonex, whose subsidiary included an FCA-registered crypto custodian.

His remarks represent a competitor’s assessment rather than a finding by European regulators. Nevertheless, they reflect the central issue raised by the licensing dispute: whether Binance’s newer compliance structure has resolved concerns created by its earlier operating model.

Related: Brazil Reaffirms Crypto Donation Ban Ahead of National Elections

MiCA Deadline Raises Pressure on Binance

Europe’s transitional period ends on June 30. From July 1, crypto firms operating without MiCA authorization must stop offering regulated services and arrange an orderly wind-down or customer migration.

Binance submitted its only formal application in Greece, although the company had contacted several regulators. People familiar with the discussions said officials in Greece, Latvia, and Ireland had concerns about its corporate structure, previous anti-money laundering penalties, and internal risk culture.

Lynch said Binance had expected the Greek application to succeed and had not received a clear explanation for the setback. She added that the exchange had invested heavily in internal controls and employed around 1,500 compliance workers.

The company reports more than 300 million users globally, but has not disclosed its European customer total. Its mobile application recorded more than four million downloads across the EU last year, led by France, Germany, and Spain.

Related: Binance Pledges to Stay in Europe After Failing Greek License Bid

Past Penalties Remain Under Review

Binance and founder Changpeng Zhao reached a $4.3 billion settlement with U.S. authorities in 2023 over breaches of anti-money laundering and sanctions requirements. Zhao pleaded guilty, served a prison sentence, and was later pardoned.

European regulators have also examined Zhao’s continuing ownership interest and Binance’s international structure. Lynch said he is fully removed from company management.

Binance maintains that its Greek application satisfied MiCA requirements. The exchange is now searching for another regulatory route, although the coordinated approach among European authorities may limit its ability to shift the same application quickly between jurisdictions.

The June 30 deadline will determine whether Binance secures a new path or begins reducing services for customers across the European Union.