Binance Faces EU Regulatory Scrutiny Over Continued Operations Without MiCA License

European financial regulators are investigating whether Binance is illegally serving customers across the European Union by exploiting a narrow legal exemption, months after the cryptocurrency exchange failed to secure authorization under the bloc’s Markets in Crypto-Assets (MiCA) framework.

The European Securities and Markets Authority, alongside national watchdogs in France, Germany and Greece, have requested information from the company regarding its reliance on reverse solicitation. Under Article 61 of MiCA, this provision allows firms based outside the EU to provide services only if a client approaches them at their own exclusive initiative. Regulators view the clause as a tightly restricted exception rather than a general operating loophole, and enforcement actions including fines remain on the table if authorities determine the exchange is misapplying it.

MiCA, which represents the world’s first comprehensive regulatory framework for digital assets, required unlicensed crypto firms to begin winding down their EU operations immediately on July 1. The mandate left no grace period. Firms without authorization were permitted to interact with existing European customers solely to facilitate the transfer or liquidation of their holdings. Spain’s securities regulator chairman publicly ruled out any extensions days before the deadline, confirming that supervisors were actively coordinating with unregistered platforms to ensure client assets were moved to compliant entities.

Binance previously held registrations in six member states: France, Italy, Lithuania, Poland, Spain and Sweden. All six lapsed when MiCA took full effect. The exchange withdrew its specific application in Greece in June, one week after reports surfaced that the Hellenic Capital Market Commission intended to reject it. At the time, the company stated it would seek authorization in a different member state while taking steps to maintain compliance.

Instead of exiting the European market, the platform appears to have rerouted its operations. Customers located outside the six countries where Binance previously held local registrations are now being served by an entity regulated in Abu Dhabi, where the exchange secured authorization in December 2025. This routing structure places the operational burden on a jurisdiction outside EU oversight while maintaining access for European users.

ESMA has repeatedly warned against treating reverse solicitation as a compliance workaround. The authority’s published guidelines dictate that the standard must be construed narrowly, establishing that whether a client genuinely initiated contact is a question of fact. Contractual arrangements, terms of service updates or website disclaimers cannot override contrary evidence of active marketing or solicitation. The Netherlands’ Authority for the Financial Markets echoed this stance, stating that firms cannot simply claim reverse solicitation without meeting clear evidentiary requirements. Both ESMA and the Dutch regulator declined to comment on Binance specifically, as did the French, German and Greek authorities.

The scrutiny extends beyond the industry’s largest player. Authorities are examining smaller unregistered firms utilizing similar cross-border routing strategies to maintain their European user bases, signaling a coordinated enforcement wave rather than an isolated inquiry.

Binance maintains that it complies with all applicable regulatory requirements in every jurisdiction where it operates and keeps its products under continuous review against relevant obligations. The company confirmed it is actively working toward becoming MiCA-authorized.

The probe arrives during a critical stabilization phase for the European digital asset sector. Since the July 1 cutoff, several mid-tier exchanges have either secured passports through member-state regulators like France’s AMF or exited the bloc entirely. Binance’s attempt to bridge the gap using its Abu Dhabi license tests whether MiCA’s territorial boundaries can be enforced against platforms with global infrastructure and established brand recognition among retail investors.