Binance Faces EU Scrutiny Over Crypto Services Without MiCA License

European regulators are examining how Binance continues to serve cryptocurrency customers across the European Union after the exchange failed to secure authorization under the bloc’s new digital-asset rules, according to Euronews.

The scrutiny centers on Binance’s reliance on a limited exemption known as “reverse solicitation,” which permits a company outside the EU to provide services when a customer approaches it entirely on their own initiative, Euronews reported Thursday.

The European Securities and Markets Authority, or ESMA, and regulators in France, Germany and Greece are among the authorities examining the arrangement, according to the Euronews report. Some regulators have sought information from Binance, and enforcement measures — potentially including financial penalties — could follow if authorities determine the company has not complied with applicable rules, Euronews said, citing the Financial Times.

The questions come after Binance failed to obtain authorization under the EU’s Markets in Crypto-Assets regulation, known as MiCA. Companies without the required authorization were expected to begin winding down their EU operations from July 1, with continued service generally limited to helping existing customers dispose of or transfer their crypto assets, according to Euronews.