Binance Under Fire for EU Exemption Use
European regulators are scrutinizing Binance's use of a legal exemption to continue operating in the region. The exemption, known as 'reverse solicitation,' allows companies based outside the European Union to offer financial services to EU customers if those customers initiate contact.
The Financial Times reported that regulators from countries including France, Germany, and Greece are investigating Binance's use of this exemption. Under the European Union's Markets in Crypto Assets (MiCA) regulation, unlicensed crypto firms were required to wind down their EU business by July 1. However, Binance has continued to operate.
Regulators have requested information from Binance and could take enforcement action if they are dissatisfied with the company's response. The European Securities and Markets Authority (ESMA) stated that the reverse solicitation exemption should be used narrowly and not to circumvent MiCA requirements.