EU officials are questioning crypto platform Binance over its use of a legal exemption to continue serving customers in the region, despite its failure to secure a licence and an order to wind down its business in the bloc. Under the EU’s new crypto rules, unlicensed crypto companies should have taken “immediate steps” to wind down their EU businesses from July 1 and stopped serving customers other than to help them transfer or sell their crypto holdings. The European Securities and Markets Authority, the EU’s watchdog, and national regulators including those in France, Germany and Greece are looking into Binance’s use of “reverse solicitation”, a legal exemption allowing companies based outside the EU to provide financial services to customers in the bloc if those users seek the relationship entirely on their own initiative, the people said.
Some regulators have requested information from the company. It marks the latest regulatory probe facing the world’s biggest crypto venue, which has faced licensing issues and investigations for years. The company was fined a record $4.3bn in the US in 2023 and pleaded guilty to criminal charges related to money laundering and breaching international financial sanctions.
Reverse solicitation shot to prominence in Europe after Brexit, when UK-based companies sought to use it to continue serving EU clients without needing to get a separate licence in the bloc. However, EU laws state that crypto companies should make only “narrow” use of the exemption and impose strict restrictions even when it is allowed. If the regulators are not satisfied with Binance’s response, they could take enforcement action, including imposing fines, the people said.
Regulators are also looking into other, smaller companies, one of the people said. “The reverse solicitation exemption should be understood as very narrowly framed. It should be regarded as the exception and not be used to circumvent Mi CA requirements,” said Esma, referring to the EU’s Markets in Crypto Assets regime. The Autoriteit Financiële Markten, the Dutch market watchdog, said: “We see the importance of tackling the illegal provision of crypto-asset services and to undertake appropriate supervisory actions (such as enforcement), in order to protect consumers and to ensure a level playing field.”“Crypto asset service providers cannot simply claim reverse solicitation: there are clear requirements and guidelines that must be met,” the AFM added.
Germany, France and Greece’s financial market regulators declined to comment. Esma and the AFM declined to comment specifically on the Binance case. Binance said it “complies with applicable regulatory requirements in the jurisdictions in which it operates” and that its “products and services continue to be reviewed and aligned with relevant regulatory obligations”.“We are actively working toward becoming Mi CA-authorised and view this as an important step in providing users with a consistent, regulated, and trusted service across the European market,” it added.
Binance had local licences in several European countries including France, Spain and Poland, which have lapsed under the Mi CA regime. Crypto traders who are not based in one of those countries receive services from Binance’s Abu Dhabi-regulated entity, one user living in Austria and two people familiar with the matter told the FT. Binance became regulated in Abu Dhabi in December 2025.“Nothing has changed for me, same experience like before,” the user said, adding that they can buy, sell and ...
Source: Financial Times Companies · Summarized by HeadlinesBriefing