EU Regulators Question Binance's Use of Reverse-Solicitation Exemption

European regulators are scrutinizing Binance's continued service to customers in the European Union after the crypto exchange failed to secure a license under the bloc's new Markets in Crypto-Assets (MiCA) rules.

Binance had been expected to wind down its EU business from July 1, but it continued to onboard new customers, highlighting compliance gaps for global exchanges under the new rules.

The European Securities and Markets Authority (ESMA) and regulators in France, Germany, and Greece are looking into Binance's reliance on the reverse-solicitation exemption, which allows firms outside the EU to serve customers who independently approach them.

Regulators have requested information from Binance as they assess whether the exchange is using the exemption within the limits of EU law. If Binance's exemption claim fails, enforcement measures, including possible fines, could follow.