Binance Faces Fresh EU Scrutiny Over Services to European Customers

• EU regulators are examining Binance’s use of the reverse solicitation exemption.
• Binance withdrew its Greek MiCA application and now reportedly pursues France.
• Regulators may impose fines if Binance’s explanations fail to satisfy them.

Binance is facing fresh scrutiny from European regulators over how it continues serving EU customers after failing to secure MiCA authorization before the bloc’s July 2026 deadline. 

The European Securities and Markets Authority (ESMA), alongside regulators in France, Germany and Greece, is examining whether Binance can rely on the “reverse solicitation” exemption, according to sources familiar with the matter cited by the Financial Times.

The review could determine how much room Binance has to serve European users while it pursues a new MiCA authorisation.

Regulators Examine Binance’s Reverse Solicitation Use

According to the Financial Times report, ESMA and national regulators in France, Germany and Greece are examining how Binance uses the exemption, and some have requested information from the company. One source said smaller firms are also being examined.

Under MiCA, unlicensed crypto firms were supposed to begin winding down EU operations from July 1, 2026. They were to limit activity to what is needed to transfer or sell clients’ assets.

ESMA confirmed to the FT that reverse solicitation must be interpreted very narrowly and cannot be used to circumvent MiCA. The exception applies when a customer approaches a firm on their own initiative rather than being marketed to.

The FT also reports that some EU customers are served through Binance’s Abu Dhabi-regulated entity, which has held authorisation since December 2025. MiCA treats that entity as a third-country firm with no passporting rights.

If regulators are not satisfied with Binance’s explanations, the FT points to possible enforcement measures, including fines. 

Binance says it complies with the rules where it operates and is “actively working toward becoming MiCA-authorised.” It is reportedly pursuing a licence through France.

Abu Dhabi Routing 

Binance may use its regulated Abu Dhabi entity as part of its structure for some European clients. 

Regulators are now focusing on whether that setup changes the fact that the service is provided to an EU customer, and whether it requires MiCA authorisation.

Why Does Binance not Have a MiCA Licence?

Binance previously operated in France under a national PSAN registration granted in 2022. That registration became void when France’s MiCA transition period ended on July 2, 2026.

The exchange had pursued EU-wide MiCA authorisation through Greece but withdrew that application on June 24. It said it would seek authorisation in another member state and subsequently planned to pursue France. No MiCA licence had been granted before the July deadline.

Binance has also faced major legal and compliance problems in recent years, centred on AML and sanctions compliance. 

In 2023, it pleaded guilty in the U.S. to violating anti-money-laundering and sanctions laws and agreed to pay more than $4.3 billion. U.S. authorities said it processed transactions involving sanctioned jurisdictions, including Iran. 

The company has since faced renewed scrutiny over whether its controls adequately prevent sanctioned or illicit actors from using the platform.

Why This Matters

The key question is whether Binance can rely on “reverse solicitation” and non-EU entities for activity that regulators view as effectively solicited or carried out in the EU. Non-compliance could lead to fines or restrictions and make its MiCA authorisation harder to secure.

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