Binance is facing regulatory scrutiny over how it has been using a narrow exemption under the EU's Markets in Crypto-Assets Regulation (MiCA) to continue serving European clients, after losin
Binance is facing regulatory scrutiny over how it has been using a narrow exemption under the EU's Markets in Crypto-Assets Regulation (MiCA) to continue serving European clients, after losing its bid for an official licence in the bloc.
The world's largest crypto exchange had staked its EU-wide hopes on securing a MiCA licence through Greece, which would have granted passporting rights across all 27 member states. That plan collapsed when Binance withdrew its application on June 24, 2026, just days before the July 1 deadline, reportedly ahead of an expected rejection by the Hellenic Capital Market Commission. The exchange subsequently notified users in France, Italy, Spain, Poland and other member states that new services would stop from July 1.
Rather than exiting the market entirely, Binance has continued serving some EU users through what is known as the reverse solicitation exemption, and by routing some activity through its Abu Dhabi entity. That approach is now drawing close attention from regulators.
ESMA and national regulators in France, Germany and Greece are examining whether Binance genuinely meets the conditions required to rely on the exemption. Under MiCA's Article 61, a non-EU firm may serve an EU client only when that client initiates the relationship entirely on their own, without any solicitation, marketing or promotion by the firm. ESMA has made clear that operating websites, mobile apps, social media campaigns, online advertising and sponsorships can all constitute solicitation, effectively disqualifying a firm from using the exemption.
Legal experts have raised further doubts about Binance's Abu Dhabi routing strategy. As one lawyer noted, being regulated in Abu Dhabi does nothing for Binance under MiCA. In MiCA terms, routing EU users through a non-EU entity still means a third-country firm is serving those users, and the reverse solicitation provision was designed for isolated cases, not for maintaining a customer base built through years of active marketing.
ESMA has also contacted Binance directly, seeking confirmation that it is genuinely winding down EU business rather than continuing operations under a different structure. According to the Financial Times, which first reported the review, the inquiry could potentially lead to enforcement action if regulators conclude that Binance has been using the exemption improperly. National authorities have already requested information from the exchange and could impose fines if they are not satisfied with the response.
Binance has said it is working toward MiCA authorisation and complies with applicable regulatory requirements where it operates. The exchange is reportedly exploring a fresh licence application through France.
The scrutiny of reverse solicitation is also part of a broader regulatory shift. ESMA has identified the exemption as one of its MiCA supervision priorities for 2027, and findings from that work are expected to feed into the European Commission's review of MiCA, due by June 2027.
Sources:crypto.news: Binance uses MiCA workaround to keep some EU customersCoinDesk: Binance withdraws Greek MiCA bid but vows to remain in the EUCointelegraph: ESMA clarifies reverse solicitation rules under MiCA
