Binance faces EU enforcement action over unlicensed operations

European regulators are actively questioning Binance over its continued service to EU customers despite failing to secure a licence under the Markets in Crypto-Assets Regulation, the Financial Times reported Thursday.

The European Securities and Markets Authority, alongside national watchdogs in France, Germany and Greece, is examining whether Binance has improperly used the "reverse solicitation" exemption — a narrow provision that permits unlicensed firms to serve EU clients only when those clients seek out the service entirely on their own initiative. Regulators have asked Binance for information and may impose fines if its answers are unsatisfactory.

Binance lost its local licences in France, Spain and Poland when MiCA took effect, and was expected to wind down EU operations by 1 July. Its EU customers are now served through its Abu Dhabi entity. The company told Euronews it "complies with applicable regulatory requirements" but did not address the specific regulatory questions.

ESMA stated the exemption "should be regarded as the exception and not be used to circumvent MiCA requirements." Smaller crypto firms using the same exemption are also under review.

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Sebastian Montague

Prediction Markets Trader

Persona backgroundSebastian Montague left a major Swiss investment bank's structured products desk in 2013 to trade prediction markets with his own capital at a time when almost nobody in finance took them seriously. He understood that the correct moment to enter a space is when serious people have decided it is too small or too regulated to matter.