Binance Faces EU Probe Over Reverse Solicitation Exemption

European regulators have launched a formal investigation into Binance's use of the reverse solicitation exemption to serve customers across the EU without a MiCA license. The exemption, found in Article 61 of MiCA, allows overseas firms to serve EU clients without local authorization if the client initiates contact independently, without prior advertising or solicitation. However, regulators are now examining whether Binance stretched this exemption beyond its intended scope after missing the deadline to secure a MiCA license.

Binance initially pursued authorization through Greece, a route that would have allowed it to passport a single license across other EU member states. However, the exchange withdrew its Greek application in June following high-level political intervention and opposition from the central bank. Binance then pivoted towards operating via the UAE, stating that 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.

The investigation centers on how Binance's use of the reverse solicitation exemption affects the enforceability of MiCA's licensing regime. Regulators are seeking to determine whether Binance's customer relationships genuinely started on the clients' own initiative or if the exchange's marketing and continued account openings crossed a line MiCA was designed to prevent.