Binance Faces EU Scrutiny Over MiCA License

Binance, the leading cryptocurrency exchange, is facing scrutiny from European regulators over its continued provision of services to EU customers without obtaining a license under the bloc's new digital-asset rules, known as MiCA. According to Euronews, the exchange has been relying on a limited exemption called 'reverse solicitation,' which permits a company outside the EU to provide services when a customer approaches it entirely on their own initiative.

The scrutiny centers on Binance's failure to secure authorization under MiCA, which was expected to take effect on July 1. Companies without the required authorization were expected to begin winding down their EU operations, with continued service generally limited to helping existing customers dispose of or transfer their crypto assets.

Regulators in France, Germany, and Greece, as well as the European Securities and Markets Authority (ESMA), are among the authorities examining Binance's arrangement. Some regulators have sought information from Binance, and enforcement measures, potentially including financial penalties, could follow if authorities determine the company has not complied with applicable rules.

Binance previously sought MiCA authorization in Greece but withdrew its application before the end of the regulatory transition period. The company said at the time that it intended to pursue authorization through another EU member state.