Binance's European Operations Refuse to Die Despite EU License Snub

Binance's European operations have been in limbo since July 1, when the exchange failed to meet the deadline for obtaining an EU license under the Markets in Crypto-Assets (MiCA) Regulation. Although Binance withdrew its application in Greece just days before the deadline, claiming it wanted 'more clarity' as it worked to obtain authorization elsewhere, its European business hasn't ground to a halt.

In fact, despite being locked out of the EU market on paper, millions of Binance users remain active on the platform. In France alone, where Binance serves about 2 million people, customers lost the ability to engage in spot and margin trading but were still allowed to withdraw their funds. Other exchanges like Coinbase and OKX swiftly moved to attract displaced traders.

But a recent test by crypto analysis firm Sandmark revealed that Binance's onboarding process was still accessible to new users, even after seven weeks since the deadline. This gap in enforcement is due in part to how regulation works in practice, while national regulators are required to submit non-compliant providers to ESMA's public registry, only three of thirty EU supervisory authorities had done so as of mid-August.

Binance's difficulty in obtaining a license goes beyond administrative hurdles. Regulators are required to evaluate whether an applicant's management and shareholders satisfy 'fit and proper' criteria, and Binance continues to face scrutiny stemming from its $4.3 billion US settlement in 2023 and founder Changpeng Zhao's guilty plea in that case.