EU Officials Question Binance Over Continued Operations in Region
Binance, the world's largest cryptocurrency exchange, is under scrutiny by EU officials over its use of a legal exemption to continue serving customers in the region despite an order to wind down its business in the bloc.
The issue stems from Binance's rejection earlier this year of its application for a new licence under the Markets in Crypto-Assets (MiCA) regime, which required crypto companies to obtain a license by June 30 to continue operating across the EU.
Without a licence, Binance would not qualify to continue operating in the EU from July. However, it has been using 'reverse solicitation', a legal exemption that allows companies based outside the EU to provide financial services to customers in the bloc if those users seek the relationship entirely on their own initiative.
The European Securities and Markets Authority (ESMA) and national regulators are looking into Binance's use of this exemption, with some requesting information from the company and potentially taking enforcement action, including imposing fines, if they are not satisfied with its response.