European Securities and Markets Authority (ESMA) and regulators in France, Germany, and Greece are reportedly examining Binance’s reliance on the reverse solicitation exemption under the Markets in Crypto-Assets Regulation (MiCA). The Financial Times reported that these authorities are scrutinizing whether the exchange is using this legal provision to circumvent MiCA requirements while continuing to serve European Union customers. Binance withdrew its Greek MiCA application in June and stated it would seek authorization in another member state, though it has not confirmed current talks with EU regulators.
The reverse solicitation exemption permits non-EU crypto asset service providers to serve customers who approach them entirely on their own initiative. However, ESMA guidelines explicitly prohibit companies from using this mechanism to bypass regulatory obligations. Some EU traders are currently being served through Binance’s Abu Dhabi-regulated entity following the end of MiCA’s transitional period on July 1. Meanwhile, ESMA’s register of non-compliant crypto providers expanded from 164 entries on July 16 to 173 by September 30, although Binance does not appear on the latest list. ESMA Chair Verena Ross recently indicated a shift in focus from rulemaking toward supervision and convergence.
This scrutiny highlights the tension between Binance’s operational continuity in Europe and the tightening enforcement environment under MiCA. By leveraging the reverse solicitation exemption and routing some users through its Abu Dhabi entity, Binance attempts to maintain market access while awaiting formal authorization. However, ESMA’s explicit warnings against circumventing MiCA requirements suggest that regulators view such strategies as potential compliance gaps rather than legitimate business models. The investigation signals that national authorities are prepared to challenge interpretations of exemptions that allow unlicensed entities to retain significant user bases within the bloc.
The broader implication for institutional adoption and market structure is the increasing pressure on global exchanges to secure local licenses or face restricted access. ESMA’s call for stronger powers over non-EU firms soliciting European investors indicates a move toward more consistent supervisory action across jurisdictions. As the register of non-compliant providers grows, the lack of Binance’s inclusion may reflect ongoing procedural complexities rather than clearance. Market participants should monitor whether regulators enforce stricter boundaries on cross-border servicing, which could force further localization of infrastructure and custody solutions for major crypto platforms operating in the EU.
