EU watchdogs question Binance over unlicensed European operations

The world's biggest cryptocurrency exchange, Binance, is coming under scrutiny from EU watchdogs for maintaining operations in the bloc despite being ordered to cease its European activities, according to a report by the Financial Times. The exchange failed to obtain a license under the Markets in Crypto-Assets Regulation (MiCA) this summer.

Under MiCA, unlicensed companies were required to wind down their operations in the EU by July 1 and serve customers solely to assist them in transferring or selling their crypto holdings. The European Securities and Markets Authority (ESMA) and national regulators in France, Germany, and Greece are now looking into Binance's use of reverse solicitation.

This legal exemption allows companies outside the EU to serve customers within the bloc, provided customers seek the service out on their own. Some regulators have requested information from Binance, and enforcement actions, including fines, may be taken if they are not satisfied with Binance's responses. ESMA has emphasized that the reverse solicitation exemption should be understood as narrowly defined and used not to circumvent MiCA requirements.

Binance's local licenses in countries like France, Spain, and Poland have expired under MiCA, while customers in other EU countries are served by its entity in Abu Dhabi, where it has been regulated since December 2025. Despite the MiCA deadline on July 1, European users on the platform have not experienced any changes. Binance declined to comment on the regulators' inquiries, stating that it complies with applicable regulatory requirements.

ESMA, however, declined to comment on specific cases but stressed that supervision, investigation, and enforcement are national competences under MiCA, with ESMA promoting consistent supervision across the bloc. Penalties against Binance would be handled by national authorities, not ESMA itself.