EU questions Binance over continued operations despite wind-down order, FT reports
Crypto companies in the EU require a licence by the end of June to continue operating
EU officials are scrutinizing Binance's use of a legal exemption to continue operating in the region despite an order to wind down its business, according to the Financial Times. Binance, the largest cryptocurrency exchange globally, lost permission to serve European Union clients after its application for a new licence was rejected earlier this year.
The European Securities and Markets Authority (ESMA) and national regulators are examining Binance's use of "reverse solicitation", a legal exemption that permits companies outside the EU to provide financial services to EU customers if those users seek the relationship entirely on their own. ESMA stated that the exemption should be narrowly interpreted and not used to bypass MiCA requirements.
Binance confirmed it is working towards MiCA authorization and complies with applicable regulations. Some regulators have requested information from Binance and may impose fines if they are unsatisfied with the company's response.
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