Binance Faces EU Scrutiny Over Reverse Solicitation Exemption

European regulators are scrutinizing Binance's continued access to customers in the EU after the exchange failed to secure a MiCA licence and used the reverse solicitation exemption.

The Financial Times reported that ESMA and national regulators are examining Binance's operating model, following its failure to obtain authorisation under the Markets in Crypto-Assets framework.

MiCA requires crypto service providers to obtain regulatory approval to operate across the European market. Unlicensed companies faced a July 1 deadline to begin winding down their EU operations, but could continue limited services mainly to help customers transfer or sell existing crypto holdings.

Binance continues serving some European customers through structures outside the EU regulatory framework and relies on reverse solicitation, which allows certain cross-border services under specific conditions. Regulators now want to establish whether customers genuinely initiated those relationships themselves.