Binance Faces EU Scrutiny Over Reverse Solicitation Exemption
Binance, the world's largest cryptocurrency exchange, is facing scrutiny from European Union officials over its continued operations in the region despite an order to wind down its business.
The Financial Times reported that EU authorities are questioning Binance's use of a legal exemption called 'reverse solicitation' to continue serving customers in the bloc. This exemption allows companies based outside the EU to provide financial services to customers within the region if those users seek the relationship entirely on their own initiative.
Under new EU rules, known as Markets in Crypto-Assets (MiCA), crypto companies were required to obtain a licence by the end of June to continue operating across the bloc. Binance's application for this license was rejected earlier in 2026, threatening access for millions of users.
The European Securities and Markets Authority (ESMA) and national regulators are looking into Binance's use of reverse solicitation, with some requesting information from the company and potentially taking enforcement action, including imposing fines, if they are not satisfied with Binance's response.