EU Presses Binance Over ‘Reverse Solicitation’ Exemption for Users: Report

In brief

• ESMA and national regulators in France, Germany and Greece are looking at how Binance continues to serve EU users, the Financial Times reported.
• The exchange failed to secure a MiCA license this summer and should have begun winding down its EU business from July 1.
• Regulators could impose fines if they are not satisfied with the response.

European regulators are questioning how Binance continues to serve customers in the bloc months after failing to secure a license under its crypto rules, the Financial Times reported, citing people familiar with the matter.

The European Securities and Markets Authority and national watchdogs including those in France, Germany and Greece are examining the exchange's reliance on reverse solicitation, the exemption under Article 61 of MiCA for services a firm outside the bloc provides at what the rules call the client's "own exclusive initiative." Some regulators have asked the company for information, and could move to enforcement, including fines, if they are not satisfied.

Under the Markets in Crypto Assets regime, unlicensed firms were supposed to take immediate steps to wind down their EU operations from July 1, serving existing customers only to help them move or sell their holdings.