EU Regulators Scrutinize Binance Over Unlicensed European Operations
ESMA and national regulators in several EU countries are examining how crypto exchange Binance uses a legal exemption to keep serving European clients without a MiCA licence. Authorities could impose fines if they are unsatisfied with the company's answers.
The world's largest cryptocurrency exchange, Binance, is facing scrutiny from EU watchdogs for continuing to serve clients in the bloc months after it was supposed to wind down its European business, the Financial Times reported, citing people familiar with the matter.
Binance failed to secure a licence this summer under the Markets in Crypto-Assets Regulation (MiCA), the EU's rulebook for the crypto sector. Unlicensed firms were required to take immediate steps to wind down EU operations by 1 July, serving customers only to help them transfer or sell existing crypto holdings.
A narrow legal exemption
The European Securities and Markets Authority (ESMA) and national regulators in countries including France, Germany and Greece are now examining how Binance applies the "reverse solicitation" exemption, which permits companies based outside the EU to serve EU customers only if those customers initiate contact entirely on their own.
Some regulators have already requested information from Binance and could pursue enforcement action, including fines, if responses prove unsatisfactory. Smaller crypto firms are also under review.
ESMA told the FT the exemption should be understood as narrowly framed and not used to circumvent MiCA requirements. The Dutch watchdog AFM said crypto providers cannot simply claim reverse solicitation without meeting clear requirements and guidelines.
Binance's local licences in countries such as France, Spain and Poland have lapsed under MiCA, while customers elsewhere in the EU are now served through its Abu Dhabi entity, regulated there since December 2025. The user experience on the platform has not changed since the 1 July deadline.
Binance told Euronews it complies with applicable regulatory requirements in the jurisdictions where it operates and remains committed to becoming MiCA-authorised. ESMA said supervision and enforcement under MiCA fall to national authorities, while its own role is limited to promoting consistent supervision across the bloc.
The scrutiny adds to years of regulatory trouble for Binance, which agreed in 2023 to pay $4.3 billion in US penalties and pleaded guilty to criminal charges tied to money laundering and sanctions violations.
