Invest4 publishers3 min readPublished
Four EU regulators question how Binance keeps European customers through a MiCA exemption
ESMA and regulators in France, Germany and Greece are examining how Binance still serves EU users without the MiCA license it needed by July 1. The inquiry tests whether a narrow exemption can hold an exchange's European business while it waits for authorization.
The Investor · Invest desk
What happened
- Binance is relying on MiCA's reverse-solicitation exemption, meant for clients who approach a non-EU firm on their own initiative, to keep serving some EU customers, the FT reported.
- Binance withdrew its Greek MiCA application in June, a week after Reuters reported the Hellenic Capital Market Commission was set to reject it.
- ESMA on Wednesday asked for stronger powers over non-EU firms that solicit European investors without MiCA authorization, in its response to the Commission's review of the rules.
- Regulators are also examining other, smaller crypto firms, according to one person who spoke to the FT.
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Why it matters
- exposure Because ESMA treats solicitation as a question of fact, each EU user Binance keeps through the exemption is a case a national supervisor can test on its own evidence.
- decision A fine in any one market would put a price on Binance's choice to keep serving users there instead of the wind-down MiCA required of unlicensed firms.
- precedent With smaller firms also under examination, the reading regulators apply to Binance's answers is likely to become the test for every non-EU exchange using the exemption.
Germany and Greece, two of the three national regulators named in the Financial Times report, supervise markets where Binance never held a registration [1]. The exchange's six registrations were in France, Italy, Lithuania, Poland, Spain and Sweden, and all of them lapsed under MiCA [9]. Customers outside those six countries are served by a Binance entity regulated in Abu Dhabi, which was authorized there in December 2025, according to one user and two people familiar with the arrangement [8]. On that account, German and Greek users are among its customers [3]. France is the only former registration country among the inquiring regulators [1].
Before the July 1 cutoff, Binance told Cointelegraph that EU access would depend partly on a user's jurisdiction, account status and "servicing entity" [17]. The test that entity now faces is a narrow one [6]. ESMA told the FT the exemption is very narrowly framed and should "not be used to circumvent MiCA requirements" [20]. Its guidelines treat solicitation as a question of fact and state that "contractual arrangements or disclaimers cannot supersede contrary facts" [6]. The Dutch regulator, the AFM, said firms "cannot simply claim reverse solicitation" [7].
From here, the regulators that asked for information could accept Binance's answers and stop [4]. They could instead fine the exchange one market at a time; the reports say enforcement, including fines, could follow if the answers do not satisfy them [4]. Or the Commission could grant the stronger powers over unlicensed non-EU firms that ESMA requested on Wednesday [12]. I'd expect at least one fine, though the evidence for that is the strictness of the guidance, not anything a regulator has said about Binance. The information requests already exist, while new ESMA powers depend on a review of the regulation that is still at the consultation stage [4][12]. The first outcome might never be announced. BaFin declined to say more, citing legal confidentiality obligations [19].
Binance has not wound down, or rather, it has moved the service of at least some customers to an entity outside the bloc [8]. MiCA expected unlicensed firms to begin winding down from July 1, serving existing customers only to help them move or sell their holdings [5], and days before the deadline the chairman of Spain's securities regulator ruled out exceptions or extensions [18]. Binance's alternative to an exit is the license it says it is "actively working toward becoming MiCA-authorised" for [11], a commitment it repeated to Cointelegraph on Sept. 18 [21]. Neither the reports nor Binance's statements give an EU customer count, a possible fine, or the member state where it has applied, so the cost of staying cannot be set against the cost of leaving.
ESMA chair Verena Ross said on Monday that the regulator's MiCA focus had shifted "from rulemaking towards supervision and convergence" [13]. ESMA's register of non-compliant crypto providers went from 164 entries on July 16 to 173 on Sept. 30, nine additions in 76 days [14][2]. Binance is not on it; MiCA calls the list non-exhaustive, and ESMA updates it from information supplied by national authorities and other sources [15]. If Binance is authorized in a member state before any of the three national regulators acts, the exemption will have held long enough, and I will have been wrong to expect fines [1].
What to watch
- The Commission's legislative proposal from its MiCA review, and whether it gives ESMA the powers over unlicensed non-EU firms it requested.
- Whether Binance appears in ESMA's next update to its register of non-compliant crypto providers.
- Enforcement against any of the smaller firms under examination, the first public sign of how strictly national regulators read the exemption.