ESMA says EU clients must be served by MiCA-authorised entities

The European Securities and Markets Authority (ESMA) said after the July 1 MiCA transition deadline that crypto asset service providers must be authorised under MiCA to serve customers in the European Union and the European Economic Area. ESMA added that MiCA protections apply only to the legal entity licensed in the EU.

The statement followed notifications from Binance that it would adjust services in several EU countries, including Poland, France, Spain and Italy. The company told customers in other countries they did not need to take action if they were not located in jurisdictions where the exchange operates through a local registered entity.

Article 61 of MiCA includes a narrow reverse solicitation exemption. Firms established outside the EU may serve an EU client without MiCA authorisation only when the client initiates the relationship entirely on their own, without solicitation, marketing or promotion by the firm. ESMA said the exemption does not apply where a third-country company solicits clients in the Union.

ESMA listed activities it counts as solicitation, including operating websites or mobile apps that target EU users, social media outreach, online advertising, sponsorships and influencer campaigns.

Screenshots circulating on social media suggested some Binance customer support messages indicated certain EU users could be served via the company’s Abu Dhabi Global Market (ADGM) entity. Yuriy Brisov, a lawyer at Digital & Analogue Partners, said an ADGM licence would not satisfy MiCA because ADGM is treated as a third country under the regulation. He added the reverse solicitation exemption covers isolated cases where a client independently approaches a non-EU firm, not ongoing servicing developed through marketing.

Binance did not respond to requests for clarification on whether any EU customers would continue to be serviced through its ADGM entity after the deadline. The company has said users in jurisdictions where it operates through a local registered entity may need to follow updated procedures.

MiCA establishes a unified licensing framework for crypto asset service providers operating in the EU and EEA and assigns legal rights and obligations to the licensed entity operating in the Union.