European regulators are examining whether Binance is relying too broadly on the EU’s reverse-solicitation exemption to serve customers without a Markets in Crypto-Assets Regulation (MiCA) authorisation. The scrutiny could determine whether the cryptocurrency exchange may continue onboarding users in parts of the European Union while it seeks a licence.
The review, reported by the Financial Times, involves the European Securities and Markets Authority (ESMA) and national regulators in countries including France, Germany and Greece. ESMA has stressed that national authorities, rather than the EU watchdog itself, are responsible for investigations and enforcement.
Why Binance is facing questions
Binance did not secure a MiCA licence during the summer. Under the transition arrangements described in the report, unlicensed crypto-asset service providers were expected to begin winding down their EU operations by 1 July and limit services to actions needed to help customers transfer or sell their holdings.
Regulators are now examining whether Binance has continued serving European customers by using “reverse solicitation”. This exemption can allow a non-EU firm to provide services when a customer approaches the company entirely on their own initiative, rather than as a result of marketing or active solicitation within the EU.
The central issue is whether the exemption is being used only in the narrow circumstances intended by MiCA, or whether it is effectively allowing an unlicensed business to continue operating in the single market.
What reverse solicitation means
Reverse solicitation is not a general substitute for authorisation. It is designed for limited situations in which the customer initiates the relationship without being prompted by the provider.
ESMA told the Financial Times that the exemption is “very narrowly framed” and should be treated as an exception rather than a way to avoid MiCA requirements. The Dutch Authority for the Financial Markets also said crypto-asset service providers cannot simply claim reverse solicitation without meeting the relevant conditions and guidance.
That interpretation is important because EU crypto regulation is intended to create common standards for consumer protection, market integrity and supervision. If companies could routinely rely on customer-initiated contact, regulators could find it harder to determine whether firms are effectively targeting or expanding their business in the bloc.
Which authorities are involved?
ESMA is the EU’s markets watchdog and has a coordination role under MiCA. It promotes consistent supervision, encourages cooperation between national regulators and issues guidance. However, it does not generally impose penalties in individual cases of this kind.
Under the division of responsibilities outlined by ESMA, national authorities are responsible for supervision, investigation and enforcement. That means any formal action against Binance would need to come from the relevant national regulator.
- ESMA: Coordinates supervisory cooperation and promotes consistent application of EU rules.
- National regulators: Examine conduct in their jurisdictions and may pursue enforcement where appropriate.
- Binance: Must explain how its European services fit within MiCA and the reverse-solicitation conditions.
The reported review also includes smaller cryptocurrency firms, suggesting that regulators are assessing the broader use of the exemption rather than focusing only on one exchange.
Binance says it is seeking authorisation
Binance declined to address the specific regulatory questions but said it complies with the applicable requirements in the jurisdictions where it operates. The company also said it remains committed to operating in Europe on a long-term basis under MiCA and is working towards becoming authorised.
The exchange’s regulatory position varies across Europe. Its local licences in countries including France, Spain and Poland lapsed under MiCA, while customers in other EU countries are served by a Binance entity in Abu Dhabi that has been regulated there since December 2025, according to the report.
Despite the 1 July deadline, the experience of some European users on the platform reportedly has not changed significantly. The question for regulators is whether that continuing access reflects legitimate customer-initiated activity or an operation that should require EU authorisation.
What could happen next?
The immediate next step is for Binance to respond to information requests from national authorities. Regulators could decide that its interpretation is acceptable, request changes to its practices or begin enforcement proceedings if they conclude that MiCA requirements have been bypassed.
Possible outcomes may include national measures or financial penalties, although the source material does not confirm that any fine has been imposed. The timing and scope of any action will depend on the authorities’ findings and on whether Binance obtains a MiCA authorisation.
For customers, the review does not itself announce an immediate EU-wide ban or automatic closure of Binance accounts. However, access to services could change in individual countries if national regulators determine that the exemption does not apply.
Why the case matters for EU crypto regulation
The case tests how the EU’s new crypto framework works in practice. MiCA aims to replace fragmented national approaches with a more consistent regulatory system for crypto-asset service providers operating in the EU.
The outcome could clarify how regulators interpret customer-initiated services, particularly where a platform has a large existing user base but lacks the authorisation required for active expansion. It may also influence how other international crypto firms assess their European operations.
Irish customers and businesses could be affected by any future action taken by the relevant national authorities, although the available information does not identify a specific Irish investigation. Ireland is an EU member state, but the reported enforcement responsibilities remain national rather than being exercised directly by ESMA.
Conclusion
The Binance review is not yet a final enforcement decision, but it is a significant test of the EU’s crypto-asset rulebook. National regulators are assessing whether the exchange has used reverse solicitation within MiCA’s narrow limits, while Binance says it is pursuing authorisation. The next important developments will be the regulators’ responses to the company’s explanations and whether Binance secures a licence to serve EU customers on a fully authorised basis.
