TL;DR:
- ESMA and regulators in France, Germany and Greece are examining Binance’s reliance on reverse solicitation after the exchange continued serving EU customers without MiCA authorization.
- MiCA allows offshore firms to serve customers only when services are requested on the client’s own exclusive initiative, and regulators say the exemption must be interpreted narrowly.
- Binance says it complies with applicable rules and is actively seeking MiCA authorization, while possible enforcement remains unresolved.
European regulators are intensifying scrutiny of Binance over how the exchange continues serving customers in the bloc without MiCA authorization. European regulatory scrutiny centers on Binance’s reliance on “reverse solicitation,” a narrow exemption under Article 61 of MiCA for services provided when a client acts on their own exclusive initiative. Regulators are now testing whether Binance’s servicing model fits that exemption, raising the possibility of enforcement across Europe if authorities conclude the requirements are not being met.
Reverse Solicitation Puts Binance’s EU Model Under Scrutiny
The European Securities and Markets Authority, alongside watchdogs in France, Germany and Greece, is examining the arrangement, while some regulators have requested information from Binance. Under MiCA, unlicensed firms were expected to begin winding down EU operations from July 1, serving existing customers only to help them move or sell holdings. The regulatory question is whether access reflects genuine client-initiated activity or an ongoing service model that exceeds MiCA’s narrow exception, an issue that echoes broader MiCA compliance pressure on Binance.
ESMA’s guidance says reverse solicitation must be interpreted narrowly and that contractual wording or disclaimers cannot override facts of how a customer was reached. The Dutch financial regulator has similarly said firms cannot simply claim the exemption without meeting clear conditions. That puts the burden on Binance to show that eligible EU customers approached its offshore services independently, rather than through marketing, promotion or other solicitation that would undermine the exemption.
In practice, customers outside countries where Binance previously held local registrations are being served through an entity regulated in Abu Dhabi. Binance had registrations in France, Italy, Lithuania, Poland, Spain and Sweden, but those registrations lapsed under MiCA. The exchange also withdrew its Greek MiCA application in June and said it would seek authorization elsewhere. Its European operating structure therefore remains transitional while the company pursues a regulatory path.
Binance says it complies with applicable regulatory requirements wherever it operates, keeps products under review and is actively working toward MiCA authorization. Regulators could impose fines if they are dissatisfied with the information provided, although no enforcement outcome has been announced. The immediate issue is not a finding that Binance violated MiCA, but whether regulators accept its use of reverse solicitation while authorization remains unresolved. That question extends the exchange’s ongoing European licensing challenge into a potentially more consequential supervisory phase.
