Binance opens new EU accounts despite no MiCA license

A report published by crypto analysis firm Sandmark on Aug. 21 found that Binance accepted new European registrations and completed know-your-customer verifications after the Markets in Crypto Assets framework became effective on July 1. Sandmark said its staff opened accounts from Austria, France, Germany, Spain and Belgium on Aug. 19 without receiving warnings that Binance lacked a MiCA license.

Sandmark’s testers created multiple accounts both with and without virtual private networks. Two of the accounts completed full KYC verification. Accounts that passed verification retained access to crypto services, including the ability to receive deposits, the report said.

MiCA, which took effect on July 1, requires firms offering crypto services in the European Union to obtain authorization from an EU member-state regulator or stop onboarding EU clients. The European Securities and Markets Authority issued guidance telling unauthorized firms to take immediate steps to wind down EU activities in an orderly manner; the guidance includes stopping new account openings, marketing and customer solicitation targeted at EU users.

Binance previously withdrew a MiCA licensing application with Greek authorities. The exchange has informed customers about asset safety and said transfers and withdrawals remain available where permitted by user location and account status. In communications with Sandmark, the exchange wrote: “Following the implementation of MiCA, we have taken steps to ensure that the availability of our products and services in Europe aligns with relevant legal and regulatory frameworks,” and added it is pursuing licensing to operate “on a long-term, compliant basis.”

European supervisors have begun enforcing parts of the MiCA regime. On Aug. 14 Austria’s Financial Market Authority fined Bitpanda €70,000 for notification and marketing violations related to the new framework. Sandmark’s report and Binance’s response are factual elements regulators may consider as they monitor compliance with MiCA and related guidance.