Binance Faces EU Scrutiny Over Reverse Solicitation Exemption

Binance, the world's largest cryptocurrency exchange, is under scrutiny from EU officials over its use of a legal exemption to continue serving customers in the region despite an order to wind down its business.

The European Securities and Markets Authority (ESMA) and national regulators are looking into Binance's use of 'reverse solicitation', which allows 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.

This exemption is meant for exceptional cases, but some regulators have requested information from Binance and could take enforcement action, including imposing fines, if they are not satisfied with the company's response.