EU Questions Binance Operation After Regulatory Order to Exit Bloc
The European Union (EU) is asking Binance why the cryptocurrency platform continues to operate after previously being required to cease related activities.
EU officials are questioning Binance over its use of a legal exemption to continue serving customers in the region despite an order to wind down its business in the bloc, the Financial Times reported on Thursday, citing people familiar with the matter.
The European Securities and Markets Authority (ESMA) has directly contacted Binance to request confirmation that it is genuinely winding down rather than continuing operations under another guise.
Recall that Binance previously missed the July 1, 2026 deadline to secure authorisation under the EU’s Markets in Crypto-Assets Regulation (MiCA), has withdrawn its application in Greece, and has been ordered to conduct an orderly wind-down of its EU operations.
Binance, the world’s largest cryptocurrency exchange, lost permission to offer services to European Union clients after its application under a new license regime was rejected earlier this year, threatening access for millions of users.
Under new EU rules, called Markets in Crypto-Assets, crypto companies were required to obtain a license by the end of June to continue operating across the bloc. Without a license, Binance would not qualify to continue operating in the EU from July.
The European Securities and Markets Authority and national regulators are looking into Binance’s use of “reverse solicitation”, a legal exemption allowing companies based outside the EU to provide financial services to customers in the bloc if those users seek the relationship entirely on their own initiative, the FT reported.
“The reverse solicitation exemption should be understood as very narrowly framed. It should be regarded as the exception and not be used to circumvent MiCA requirements,” ESMA told the FT.
Some regulators have requested information from the company and could take enforcement action, including imposing fines, if they are not satisfied with Binance’s response, the report said.
“Binance complies with applicable regulatory requirements in the jurisdictions in which it operates,” a spokesperson for the company told Reuters, adding that it was “actively working toward becoming MiCA-authorised.” UK FCA Secures Money Back for Victims of Crypto Fraud
