European Central Bank President Christine Lagarde personally intervened in Binance’s bid for a pan-European license by asking Greek Prime Minister Kyriakos Mitsotakis not to approve the application, The Wall Street Journal reported, citing people familiar with the talks and documents. Binance, which pursued authorization under the European Union’s Markets in Crypto-Assets regulation through Greece, withdrew its application in mid-June before the Greek regulator could officially reject it.

The application was filed with the Hellenic Capital Market Commission, or HCMC. Authorization through the Greek regulator would have allowed Binance to operate across the EU under MiCA.

According to the Journal, Binance was preparing in late May to announce that it had obtained the license. The company planned a photo shoot in Athens featuring CEO Richard Teng and Mitsotakis and intended to open a local office.

In early June, however, the HCMC told Binance that the process could not continue without political backing from Mitsotakis, the Journal reported. Its sources attributed that development to Lagarde’s personal outreach to the prime minister.

Lagarde’s reported concerns

The ECB has no formal authority to approve licenses for crypto companies under MiCA. National regulators in EU member states make those decisions, while the European Securities and Markets Authority coordinates the application of the rules.

Lagarde opposed approval of Binance’s application because of the company’s compliance record, according to the Journal. In 2023, Binance and its founder, Changpeng Zhao, pleaded guilty in the United States to violations of anti-money-laundering and sanctions laws. The exchange agreed to pay $4.3 billion in fines.

Journal sources also said Lagarde was concerned that Binance’s entry could strengthen dollar-denominated stablecoins in Europe. According to those sources, she believes Binance’s scale could accelerate the spread of such assets rather than support the development of euro-focused digital payment instruments.

Lagarde ties the digital euro project to her own legacy, according to the report. The project is intended to create a single digital payment instrument for the eurozone.

Binance withdraws its application

Greek officials informed ESMA’s Digital Finance Standing Committee in early June that the HCMC intended to approve Binance’s application, according to Journal sources.

About a week later, Binance was told that the license would not be issued because the required “convergence” was lacking, the report said. Binance withdrew its application in mid-June before the HCMC could formally reject it.

Binance later confirmed the withdrawal and said it planned to seek authorization in another EU country. The company attributed its decision to the status and timing of the Greek process.

A Binance spokesperson called the procedure problematic and said MiCA should not turn into a process in which applicants can be “undermined through unofficial channels.”

The HCMC denied that its officials made the comments attributed to them about Lagarde’s reported interference. The regulator said it assessed Binance’s application independently and solely for compliance with Greek and EU law.

ESMA said it was working with national authorities to ensure consistent application of MiCA and reduce the risks of regulatory arbitrage.

Binance previously signed three agreements with Kazakhstan government agencies.

Source: Incrypted