Binance Faces EU Scrutiny Over Reverse Solicitation Exemption

EU regulators are scrutinizing Binance's operations in the region, questioning whether the exchange is improperly relying on the reverse solicitation exemption to continue providing crypto services to customers in the bloc.

Under the Markets in Crypto-Assets (MiCA) regulations, unlicensed crypto companies must begin winding down their EU businesses from July 1 and restrict services to existing customers to activities needed to transfer or sell their crypto holdings.

Reverse solicitation provides a limited exception for companies outside the EU when customers independently initiate a business relationship, but European rules place strict limits on its use.

ESMA and regulators in France, Germany, and Greece are among those looking into the issue, with some authorities requesting information from Binance.

Binance's European operations vary by jurisdiction, with customers who are not based in countries where Binance previously held local licenses served through its Abu Dhabi-regulated entity.