Binance Faces EU Scrutiny Over MiCA Exemption Use
European Union regulators are scrutinizing Binance's use of a legal exemption to maintain services for EU customers despite an order to wind down operations in the bloc. The Financial Times reported that some regulators have requested information from Binance and could take enforcement action, including fines, if its response fails to satisfy them.
The questions center on 'reverse solicitation,' the exemption Binance has relied on since being rejected for a Markets in Crypto-Assets (MiCA) license earlier this year. The rejection threatened access for millions of EU users. ESMA says reverse solicitation is a narrow carve out that cannot be used to bypass MiCA requirements.
Binance, however, claims it is seeking MiCA approval and has stated its commitment to complying with the regulations. The exchange's move marks a regulatory setback for crypto CEX compliance and EU market adoption. Binance says nothing about when it expects to receive an answer from regulators or how long this will take.