European regulators are scrutinizing how Binance continues to offer services within the European Union months after failing to obtain a license under the bloc’s new crypto regulations, according to a report by The Financial Times, which cited individuals familiar with the matter.
Regulatory Scrutiny
The European Securities and Markets Authority (ESMA) and national financial watchdogs in countries including France, Germany, and Greece are investigating Binance’s reliance on “reverse solicitation.” This is an exemption under Article 61 of the Markets in Crypto Assets (MiCA) regulation that allows firms based outside the EU to provide services at the client’s “own exclusive initiative.” Some regulators have reportedly requested information from Binance and may pursue enforcement actions, including fines, if they are not satisfied with the exchange’s responses.
Under the MiCA framework, firms operating without a license were expected to cease their EU operations by July 1, with existing customers only being served to facilitate the transfer or sale of their holdings.
Interpretation of Reverse Solicitation
ESMA’s guidelines emphasize that the reverse solicitation exemption should be interpreted narrowly. The authority stated that whether a client was solicited is a factual matter, and that “contractual arrangements or disclaimers cannot supersede contrary facts.” ESMA further clarified that the exemption is “very narrowly framed” and should “not be used to circumvent MiCA requirements.”
The Dutch regulator, the AFM, has also indicated that firms “cannot simply claim reverse solicitation,” and that clear requirements and guidelines must be met. Regulators in France, Germany, and Greece, along with ESMA and the AFM, declined to comment specifically on Binance’s situation.
Operational Structure and Lapsed Registrations
In practice, customers outside the countries where Binance held local registrations are reportedly served by an entity regulated in Abu Dhabi, which received authorization in December 2025. This arrangement was described by one user and two individuals familiar with the matter. Binance previously held registrations in six EU member states: France, Italy, Lithuania, Poland, Spain, and Sweden. These registrations have all lapsed under the MiCA rules.
Binance has stated that it “complies with applicable regulatory requirements” in all jurisdictions where it operates and that it continuously reviews its products against relevant obligations. The company added that it is “actively working toward becoming MiCA-authorised.”
Withdrawal from Greece and Compliance Efforts
The exchange withdrew its MiCA application in Greece in June, a week after reports indicated that the Hellenic Capital Market Commission was poised to reject it. At the time, Binance announced it would seek authorization in another member state while taking necessary steps to remain compliant before the July deadline. The company had warned that some users might be affected by these changes.
There was no grace period for compliance. Days before the July cutoff, the chairman of Spain’s securities regulator ruled out any exceptions or extensions and confirmed that supervisors were in contact with unlicensed firms to ensure they had plans for transferring client assets.
Regulators are also reportedly examining other, smaller firms in a similar manner, according to one source.
