Binance's Reverse Solicitation Model Under EU Regulator Scrutiny
European regulators are scrutinizing Binance's model for serving EU customers without MiCA authorization. The exchange relies on 'reverse solicitation,' a narrow exemption under Article 61 of MiCA, which allows offshore firms to serve clients only when services are requested on the client's own initiative.
The European Securities and Markets Authority (ESMA) and regulators in France, Germany, and Greece are examining Binance's reliance on reverse solicitation. Regulators say the exemption must be interpreted narrowly, and contractual wording or disclaimers cannot override facts of how a customer was reached.
Binance says it complies with applicable regulatory requirements wherever it operates and is actively seeking MiCA authorization. However, regulators could impose fines if they are dissatisfied with the information provided.