Binance Faces Fresh EU Scrutiny Over MiCA Reverse Solicitation Exemption

Binance is facing fresh scrutiny from European regulators over its use of MiCA's reverse solicitation exemption. This comes after the exchange failed to secure a MiCA license, which should have led to it winding down its EU operations on July 1.

The review involves the European Securities and Markets Authority (ESMA) and national regulators in France, Germany, and Greece examining whether Binance's current service model genuinely meets the conditions for reverse solicitation. This exemption allows non-EU companies to serve European clients without a separate license, but only when those clients independently seek out the relationship.

Binance operates under this exemption in EU countries where it has no local license, with customers onboarding of their own volition. However, ESMA has stated that reverse solicitation should be regarded as an exception rather than a way to circumvent MiCA requirements.