Binance Faces EU Scrutiny Over MiCA Licensing Exemption

MiCA licensing exemption — European regulators are reportedly examining Binance‘s reliance on a legal exemption to serve customers in the European Union without formal authorization under the bloc’s Markets in Crypto-Assets Regulation (MiCA).

The Financial Times reported that the European Securities and Markets Authority (ESMA) and national regulators in France, Germany, and Greece are scrutinizing Binance’s use of the ‘reverse solicitation‘ exemption. This rule allows non-EU crypto firms to serve clients who approach them entirely on their own initiative, but ESMA guidelines warn it cannot be used to circumvent MiCA’s requirements.

Binance withdrew its application for MiCA authorization in Greece in June, stating it would seek authorization in another EU member state. The exchange told Cointelegraph it continues to pursue MiCA authorization and remains committed to compliant long-term operations in Europe. Some EU customers are reportedly being served through Binance’s Abu Dhabi-regulated entity.

ESMA has concurrently called for stronger enforcement powers over non-EU companies that solicit European investors without MiCA authorization. The regulator’s chair, Verena Ross, stated this week that ESMA’s focus has shifted from rulemaking to supervision. Binance does not currently appear on ESMA’s public register of non-compliant crypto providers, which the authority describes as non-exhaustive.