EU watchdogs question Binance over unlicensed European operations
European regulators are questioning Binance over its use of a narrow legal exemption to keep serving EU customers without a licence, the Financial Times reported. Binance told Euronews it is working towards authorisation, while ESMA said enforcement is a matter for national authorities.
The world's largest cryptocurrency exchange, Binance, is facing scrutiny from EU watchdogs over its continued operations in Europe despite being told to cease its European business. The Financial Times reported on Thursday that Binance has failed to obtain a license under the Markets in Crypto-Assets Regulation (MiCA). Unlicensed companies were expected to wind down their EU operations by 1 July and only serve customers to help them transfer or sell their crypto holdings.
EU's markets watchdog, ESMA, and national regulators in countries such as France, Germany, and Greece are examining how Binance uses the reverse solicitation exception, which allows companies outside the EU to serve customers within the bloc as long as those customers seek out the service on their own. Some regulators have requested information from Binance and could impose fines if they are not satisfied with its answers.
ESMA emphasized that the reverse solicitation exemption should be understood as very narrowly framed and not used to circumvent MiCA requirements. The Dutch market watchdog AFM further stated that crypto asset service providers cannot simply claim reverse solicitation and must meet clear requirements and guidelines.
Binance's local licenses in countries like France, Spain, and Poland have lapsed under MiCA, while its entity in Abu Dhabi has been regulated since December 2025. However, European users have not experienced any changes in their interactions with the platform since the MiCA deadline on 1 July. Binance operates under reverse solicitation in countries where it holds no local license and sees customers wanting to onboard on their own accord.
The company stated that it complies with applicable regulatory requirements in the jurisdictions in which it operates and is committed to operating long-term, compliantly under MiCA.
The scrutiny adds to Binance's lengthy regulatory troubles, which include paying $4.3bn in penalties in the US in 2023 for money laundering and breaching US sanctions. Whether Binance can retain its European users now depends on how regulators interpret the reverse solicitation exemption and how quickly Binance secures the license it is pursuing.
Written by urgent.news from Euronews's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
