When European Binance users opened their mobile app on Wednesday, they encountered a surprising message informing them that some services were no longer accessible in their region. This abrupt change coincides with the implementation of new cryptocurrency regulations in Europe, which take effect at the end of June.

To comply with these regulations, Binance has already started restricting access to certain services, such as copy trading, starting from June 26.

Significant Restrictions for European Binance Users

A year ago, the European Union introduced the Markets in Crypto-assets (MiCA) regulation package, aimed at overseeing the digital assets industry across Europe and the European Economic Area (EEA). These new rules, particularly those concerning stablecoins, will significantly affect European cryptocurrency exchanges beginning June 30, 2024.

Binance, the largest cryptocurrency exchange by monthly transactions, is the first to implement these changes. This move directly impacts users who participate in copy trading, with restrictions starting immediately from Wednesday.

In a recent announcement, Binance urged affected lead traders and copy traders to close their positions and transfer their funds to their Spot Wallets by June 27, 23:59 (UTC +3). Any open positions remaining after this deadline will be automatically closed at market price, and the funds will be moved to spot wallets.

Impact on Stablecoins and Other Services

From June 30, Binance will cease supporting several key services if they involve “unregulated” stablecoins. However, the exchange reassured users that stablecoins not regulated under MiCA, including USDT, would still be available for trading on the spot market, as well as for deposits, withdrawals, and wallet storage. These stablecoins can also be sold via the Convert feature. Binance emphasized that it will not delist these stablecoins for the time being.

Key changes for EEA users include:

  • Restrictions on purchasing unauthorized stablecoins through Binance Convert
  • Limitations on new borrowings and transfers of unauthorized stablecoins in margin trading
  • Blocking new subscriptions involving unauthorized stablecoins in products like Simple Earn, Binance Loans, and Dual Investment
  • Restrictions on peer-to-peer (P2P) trading and over-the-counter (OTC) purchases of unauthorized stablecoins

Despite these restrictions, Binance assured users that spot trading pairs with unauthorized stablecoins would remain available, and they would still be able to withdraw or deposit these tokens to their Binance wallets.

Additionally, Binance is updating its rewards and referral systems. Starting June 24, referral commissions for spot and margin trading will be paid in BNB, Binance’s native token, rather than stablecoins.

Preparing for the Changes

Binance has advised its European users to review their holdings and consider transitioning to regulated stablecoins or other digital assets before the June 30 deadline. This proactive approach is aimed at helping users adapt to the new regulatory environment and avoid disruptions in their trading activities.

By making these adjustments, Binance aims to ensure compliance with the new MiCA regulations while continuing to provide services to its European users.