EU Regulators Scrutinize Binance’s Use of Reverse‑Solicitation Exemption: Report

In brief

• ESMA and regulators in France, Germany and Greece are examining how Binance continues to serve EU customers, according to the Financial Times.
• The exchange did not obtain a MiCA license this summer and was required to begin winding down its EU operations from 1 July.
• Regulators may impose fines if they are not satisfied with Binance’s response.

European regulators are questioning how Binance continues to serve customers in the region months after it failed to obtain a license under the EU’s Markets in Crypto Assets (MiCA) framework, according to the Financial Times, which cited sources familiar with the case.

The European Securities and Markets Authority, together with regulators in France, Germany and Greece, are scrutinizing Binance’s use of the reverse‑solicitation exemption under Article 61 of MiCA, which permits firms outside the EU to offer services when clients initiate the request themselves. Regulators have requested information and may pursue enforcement actions, including fines, if they are unsatisfied.

Under the MiCA framework, firms operating without a license were required to begin winding down their EU activities immediately on 1 July, limiting services to existing customers so they could transfer or sell their holdings.

Binance stated that it complies with all applicable regulatory requirements in each jurisdiction and that it continuously reviews its products to meet relevant obligations. The company added that it is actively pursuing MiCA authorization.

Binance withdrew its MiCA application in Greece in June, shortly after Reuters reported that the Hellenic Capital Market Commission was poised to reject it. The firm said it would seek authorization in another member state and take the necessary steps to remain compliant before the July deadline, warning that some users could be impacted.

There was no grace period. Days before the deadline, the chairman of Spain’s securities regulator rejected any exceptions or extensions and said supervisors were in contact with unlicensed firms to ensure they had plans to transfer client assets elsewhere.

Regulators are also scrutinizing other, smaller firms, according to a source.

Source link