Binance Under EU Regulatory Scrutiny Over Reverse Solicitation Exemption

Binance, the world's largest cryptocurrency exchange, is under scrutiny from European Union regulators over its use of a legal exemption to continue serving some European customers after failing to secure a license.

The company applied for a license under the EU's Markets in Crypto-Assets rules (MiCA) earlier this year but was rejected. Under MiCA, crypto companies needed a license by June 30 to keep operating across the EU. Without one, Binance should not have been able to serve new EU clients from July onward.

Instead, reports say Binance has continued serving some European customers using a rule called 'reverse solicitation.' This rule allows a firm based outside the EU to serve EU clients in specific cases, where the client must reach out to the firm entirely on their own, without any marketing or solicitation from the company.