Binance EU Services Under Scrutiny as Licensing Exemption Questioned

European regulators are reportedly examining whether Binance’s ongoing access to certain customers in the European Union relies on a legal pathway that could be stretched beyond its intended purpose under the bloc’s Markets in Crypto-Assets Regulation (MiCA). The scrutiny comes as ESMA and national watchdogs in countries including France, Germany and Greece weigh how MiCA should be enforced against non-EU crypto asset service providers (CASPs).

According to the Financial Times, the focus is on Binance’s use of “reverse solicitation,” a concept meant to allow services only when the customer initiates contact entirely on their own. The report follows Binance’s decision to withdraw its MiCA application for Greece in June and its subsequent attempt to pursue authorization through another EU member state.

Key takeaways

• Regulators are reportedly reviewing whether Binance’s continued servicing of some EU users is compliant under MiCA’s “reverse solicitation” framework.
• ESMA guidelines emphasize that reverse solicitation must not be used to bypass MiCA authorization obligations.
• Binance previously withdrew its Greece MiCA application in June and said it remains committed to obtaining authorization elsewhere in the EU.
• ESMA is also pushing for stronger enforcement powers over non-EU firms that engage European investors without MiCA authorization.
• Despite the concerns, Binance does not appear on ESMA’s most recent public register of non-compliant providers as of Sept. 30.

Binance’s EU access and the reverse-solicitation test

The crux of the reported investigation is whether Binance is serving EU customers through reverse solicitation rather than holding MiCA authorization in the EU. The Financial Times, citing a person familiar with the matter, said ESMA and regulators in multiple jurisdictions are looking at this approach.

Reverse solicitation is an exemption mechanism recognized in MiCA-related guidance. As ESMA’s published guidelines explain, it permits a non-EU CASP to serve a customer only when the customer approaches the firm on its own initiative. ESMA’s position is that the exemption cannot be used as a workaround to evade MiCA requirements when a firm’s business activity in Europe goes beyond passive reception of customer inquiries.

Binance has argued that it is pursuing the appropriate authorization process. The exchange withdrew its Greek MiCA application in June and later told Cointelegraph that it planned to seek authorization in another EU member state.

Earlier, Binance told Cointelegraph that its ability to offer services in the EU around the end of MiCA’s transitional period on July 1 would depend partly on factors such as user jurisdiction and account status, as well as the “servicing entity.” The Financial Times reports that some EU traders are being handled through Binance’s Abu Dhabi-regulated entity.

In response to Cointelegraph, Binance did not confirm whether it was in discussions with EU regulators, saying it “complies with applicable regulatory requirements.”

Why ESMA’s guidance matters for enforcement

ESMA’s reverse-solicitation guidance is designed to draw a clear line between legitimate, customer-initiated contact and situations where a non-EU provider effectively markets or structures its offering in a way that resembles an authorized EU operation.

That distinction is especially important as MiCA’s transitional period ended on July 1 and regulators continue to shift from initial rulemaking toward supervisory convergence across member states. ESMA Chair Verena Ross said earlier this week that the agency’s MiCA focus has moved “from rulemaking towards supervision and convergence,” a signal that enforcement interpretations may become more harmonized over time.

In this context, regulators scrutinizing Binance would not be deciding only whether reverse solicitation is formally available, but whether Binance’s conduct fits within the exemption’s “entirely on their own initiative” framing. If regulators conclude that the practical reality is closer to market-facing solicitation, the exemption would likely be treated as inapplicable.

ESMA calls for stronger powers over non-EU firms

Parallel to the Binance-specific reporting, ESMA has been advocating for changes that would tighten oversight of non-EU CASPs that engage European investors without MiCA authorization. In a response to the European Commission’s consultation on reviewing MiCA, ESMA called for stronger powers, aiming to enable faster, more consistent supervisory action across the EU and to reduce opportunities for firms to exploit differences in national approaches.

ESMA’s push reflects a broader problem regulators are trying to solve: when enforcement is fragmented, non-EU firms can sometimes structure operations around regulatory asymmetries. ESMA’s proposals are framed as a way to make supervisory outcomes less dependent on where a customer or activity is effectively “caught” by authorities.

For market participants, the practical implication is that compliance risk may increase for non-EU providers that have been relying on exemption structures or indirect servicing arrangements. Even if guidance exists, the question becomes whether authorities will apply it uniformly, and whether they can act quickly enough to matter before the next regulatory cycle or political negotiation changes the boundaries.

Where Binance stands in ESMA’s non-compliance register

At the same time as regulators reportedly examine Binance’s exemption use, Binance does not currently appear on ESMA’s latest public register of non-compliant crypto providers. ESMA’s register increased from 164 entries on July 16 to 173 entries in its Sept. 30 update, according to ESMA’s Markets in Crypto-Assets Regulation (MiCA) page.

MiCA describes ESMA’s register of non-compliant entities as “non-exhaustive,” and ESMA updates it based on information from national authorities and other sources. That means the absence of a name does not necessarily equal approval or clearance; it can also reflect timing, the availability of actionable information, or whether a matter has reached the threshold for inclusion.

Germany’s BaFin declined to provide further information to the public, citing legal confidentiality obligations. ESMA and the relevant French and Greek watchdogs had not responded by the time of the report.

For EU users and compliance teams, the key takeaway is that regulatory outcomes are not limited to what appears in public lists. Companies can remain under scrutiny while still avoiding formal labeling, particularly when investigations involve interpretation of exemptions rather than simple licensing status.

What to watch next

Next, observers will likely focus on whether ESMA and national authorities move from guidance-based scrutiny toward concrete supervisory actions—especially if they conclude that reverse solicitation is being used in practice beyond its intended scope. The timing around authorization pathways and how “servicing entity” arrangements are treated under MiCA could determine how quickly this issue crystallizes for other non-EU exchanges operating in the EU.