EU Regulators Review Binance’s MiCA Licensing Exemption

European regulators are reviewing Binance’s use of reverse solicitation to serve some customers in the European Union without authorization under the Markets in Crypto-Assets Regulation, or MiCA. The review involves the European Securities and Markets Authority and regulators in France, Germany and Greece.

Reverse solicitation allows crypto-asset service providers based outside the EU to serve customers who approach them entirely on their own initiative. ESMA’s guidance says companies cannot use the exemption to avoid MiCA authorization requirements or actively market their services to EU customers.

Binance withdrew its application for a MiCA license in Greece in June and plans to seek authorization in another EU member state. In a Sept. 18 statement, the exchange confirmed that it continues to pursue MiCA authorization and intends to operate in Europe on a compliant basis.

Some EU customers are being served through Binance’s entity regulated in Abu Dhabi, according to the report. Before MiCA’s transitional period ended on July 1, Binance indicated that access could depend on a customer’s jurisdiction, account status and the entity providing the service.

Binance has not confirmed whether it is discussing the matter with EU regulators. The exchange maintains that it complies with applicable regulatory requirements.

Germany’s Federal Financial Supervisory Authority declined to provide information, citing legal confidentiality obligations. ESMA and regulators in France and Greece had not commented by publication.

ESMA has separately requested stronger powers to act against companies based outside the EU that solicit European investors without MiCA authorization. In a response to the European Commission’s consultation on changes to the regulation, the authority called for faster and more consistent enforcement across the bloc and measures to limit differences between national regulatory systems.

ESMA Chair Verena Ross has described the authority’s MiCA work as shifting from rulemaking to supervision and closer coordination among national regulators.

Binance does not appear on ESMA’s latest register of non-compliant crypto-asset service providers. The register contained 173 entries in its Sept. 30 update, compared with 164 on July 16. ESMA describes the list as non-exhaustive and updates it using information from national regulators and other sources.