Binance Under EU Regulatory Scrutiny Over Alleged Loophole Exploitation
Binance, one of the world's largest cryptocurrency exchanges, is under fire from EU regulators for allegedly continuing to serve European customers despite failing to secure authorization under the bloc's Markets in Crypto-Assets regime.
The exchange was supposed to wind down its EU operations after it did not manage to secure a license. However, Binance has relied on a regulatory loophole known as 'reverse solicitation' according to the Financial Times.
The European Securities and Markets Authority (ESMA) as well as national regulators are currently examining this matter. Binance has been asked to provide information about the legal basis on which it continues to provide services within the bloc.
The exchange could face enforcement measures as well as financial penalties if it went beyond what the aforementioned exemption actually permits.