Binance's EU License Loopholes Allow Exchange to Keep Trading

Binance's European Union (EU) licensing challenges continue to make headlines. The exchange missed the EU's MiCA licensing deadline on July 1, but it has found ways to keep operating in the bloc through workarounds.

The issue began when Binance withdrew its Greek application for a MiCA license on June 24, just as the Hellenic Capital Market Commission was about to reject it. This withdrawal allowed Binance to avoid an official denial and left the exchange without the EU-wide authorization it needed.

Instead of shutting down, Binance has been relying on two exemptions: reverse solicitation, which allows a foreign firm to service an existing EU customer base, and routing some trades through a Binance entity in Abu Dhabi. However, ESMA has questioned whether these workarounds amount to genuine compliance or just creative accounting.

The European Securities and Markets Authority (ESMA) has contacted Binance directly to confirm that its EU business is being wound down properly rather than simply relabeled as opt-in activity. Meanwhile, France's ACPR has flagged anti-money-laundering gaps at Binance, which the exchange is now addressing by pursuing a MiCA license through France's AMF.