MORGANABLE BUSINESS /MARKETS
European Union officials are questioning Binance over its continued service to some customers in the bloc after the cryptocurrency exchange failed to obtain the licence required under the EU’s Markets in Crypto-Assets (MiCA) framework.
Akure —
European Union officials are questioning Binance over its continued service to some customers in the bloc after the cryptocurrency exchange failed to obtain the licence required under the EU’s Markets in Crypto-Assets (MiCA) framework.
The latest scrutiny focuses on whether Binance can rely on a legal provision called reverse solicitation to continue serving European customers while it seeks full authorisation.
The Financial Times reported the development on October 1, citing people familiar with the matter.
Reuters also reported the story, noting that it could not immediately independently verify the Financial Times report.
Regulators from the European Securities and Markets Authority (ESMA), along with authorities in countries including France, Germany and Greece, are examining Binance’s activities.
The issue centres on the MiCA rules, which created a common regulatory framework for crypto-asset service providers across the European Union.
The rules require firms that provide regulated crypto services in the bloc to obtain appropriate authorisation.
For companies that did not secure the necessary approval, the transition period ended on June 30, 2026.
From July 1, unlicensed crypto companies were expected to begin winding down their European operations. They could still carry out limited activities needed to help customers transfer or sell their holdings.
However, regulators did not intend the transition arrangements to allow firms to continue normal business without authorisation.
Binance does not currently hold a MiCA licence in the European Union.
In June, the exchange withdrew its MiCA application in Greece and said it would pursue authorisation in another EU member state.
Binance said the decision followed its assessment of the Greek licensing process and its timetable. It also maintained that Europe remained important to its long-term plans.
The latest regulatory questions concern how Binance has continued to serve some European users.
The company has pointed to reverse solicitation, an exemption that can allow a non-EU firm to provide certain services when a customer approaches the firm independently and entirely on the customer’s own initiative.
That exemption, however, has a narrow purpose.
ESMA has stressed that reverse solicitation should not become a way for companies to avoid the MiCA licensing requirements.
In practice, regulators must determine whether customers genuinely approached Binance themselves or whether the exchange, its representatives or other parties encouraged them to use its services.
This distinction is important because active marketing can undermine a company’s reliance on reverse solicitation.
Therefore, regulators are examining how Binance acquired and continues to serve customers in the region.
According to the Financial Times report, some regulators have already requested information from Binance.
Authorities could consider enforcement measures, including fines, if they are not satisfied with the company’s explanations or determine that its activities breach EU rules.
The investigation remains ongoing, so the final outcome is not yet clear.
Binance, for its part, has said it complies with applicable regulatory requirements in the jurisdictions where it operates.
The exchange has also said that it continually reviews and adjusts its products and services to meet regulatory obligations.
In addition, Binance continues to seek MiCA authorisation, which it describes as an important step toward providing unified services to European users.
The company’s withdrawal from Greece marked an important change in its European licensing strategy.
Binance had spent months working with Greece’s Hellenic Capital Market Commission on its application.
However, on June 24, it announced that it had withdrawn the application and would seek approval elsewhere in the bloc.
In its announcement, Binance said it remained committed to Europe and wanted to operate under a clear and harmonised MiCA framework.
The company also said it would announce the next EU member state involved in its licensing plans when it was ready.
Meanwhile, the regulatory scrutiny highlights the challenges facing large crypto exchanges as European authorities move from creating rules to enforcing them.
MiCA is intended to provide consistent requirements across the bloc, while also strengthening consumer protection and market oversight.
For regulators, the Binance case raises a broader question about how companies outside the EU can interact with European customers without obtaining a local or EU-wide authorisation.
If reverse solicitation were interpreted too broadly, authorities could face difficulties enforcing the new framework consistently.
The matter could also affect other crypto companies operating across borders. Firms without MiCA
authorisation may need to review how they acquire European customers, how they communicate with existing users and which services they continue to provide. Consequently.
Binance’s situation could become an important example of how regulators apply the rules to offshore platforms.
For European customers, the immediate situation does not necessarily mean that every Binance service has stopped. Instead.
The regulatory questions concern the legal basis for certain activities and the extent to which Binance can continue serving customers while it seeks authorisation.
The company has also routed some services through its Abu Dhabi-regulated entity, according to reporting on its European operations.
However, using another regulated entity does not automatically settle the EU licensing question. Regulators still need to establish whether specific services offered to European customers comply with applicable rules.
At the same time, the case shows why MiCA matters to the European crypto market. Before the framework, companies faced a patchwork of national rules across member states.
MiCA aims to create a more consistent system, allowing authorised firms to operate across the bloc under common requirements.
For now, Binance continues to work toward a MiCA licence in Europe while regulators examine its operations.
The outcome will be closely watched by crypto businesses and European customers as the EU moves into a more active phase of digital-asset supervision.
