Binance, the world’s leading cryptocurrency exchange by trading volume, is facing increased scrutiny from European Union regulators over its continued service to EU customers following its failure to secure a license under the new Markets in Crypto-Assets (MiCA) regime.
Regulatory pressure mounts
European authorities have questioned Binance’s decision to keep operating in the EU, despite explicit rules requiring digital asset companies to obtain regulatory approval. After the end of the MiCA transition period on July 1, Binance was expected to cease its European operations, particularly after it withdrew its licensing application in Greece following expectations of a rejection.
The European Securities and Markets Authority (ESMA) and various national regulators are now investigating whether Binance’s activities in the EU are lawful. These bodies have specifically requested documents from the company detailing how it justifies providing services to customers in the bloc without appropriate regulatory authorization.
EU regulators are reviewing the legal grounds on which Binance continues to serve customers within the bloc after missing MiCA compliance.
Binance has informed users in Europe about the upcoming suspension of services before the regulatory deadline. The company stressed that it notified affected customers in advance regarding the need to restrict services in order to comply with EU requirements.
Reverse solicitation under review
Despite public statements about service withdrawal, some EU users have continued to access Binance’s trading platform. According to reports, Binance may have relied on a regulatory exemption known as “reverse solicitation,” which allows companies to service clients who approach them on their own initiative, rather than the business actively soliciting EU customers.
ESMA and other authorities are examining whether Binance’s use of the reverse solicitation loophole goes beyond what the regulation permits. If regulators determine the company exceeded its legal remit, Binance could face enforcement actions and potential financial penalties.
Mini dictionary: Reverse solicitation, a concept in financial regulation, refers to scenarios where a client initiates contact with a service provider, enabling the provider to offer services without breaching local licensing requirements. In the context of MiCA, this means exchanges may argue exemption from licensing for activities not actively marketed to EU clients.
Offshore activity and MiCA compliance
Some European customers report continued access to Binance’s services, allegedly through an Abu Dhabi-based entity. Binance obtained full authorization from the Financial Services Regulatory Authority of Abu Dhabi Global Market in December 2025, enabling it to operate internationally, but not as an EU-regulated provider.
The ongoing dispute highlights challenges in enforcing the new MiCA framework, as its goal is to unify and strengthen crypto regulation within the EU. Allowing global platforms to rely on exemptions could undermine the regime’s effectiveness.
Despite these setbacks, Binance has not abandoned its ambitions in Europe. The exchange has stated it remains committed to securing MiCA authorization and continues to engage with EU regulators.
Binance maintains it complies with requirements in each jurisdiction and is actively working towards obtaining a MiCA license.
The outcome of this regulatory standoff could set important precedents for how international crypto exchanges interact with the European market under the MiCA regime.
