European regulators are scrutinizing Binance over its continued servicing of some EU customers after the exchange entered July without authorization under the Markets in Crypto-Assets Regulation. The central question is whether Binance has relied too broadly on MiCA’s narrow reverse-solicitation exemption while continuing to operate from outside the bloc. According to a Reuters report published October 1, authorities have sought explanations from the exchange and could consider enforcement if they conclude its post-deadline activity falls outside the exemption.
Binance withdrew its Greek MiCA application on June 24 before the Hellenic Capital Market Commission issued a formal decision and said it would seek authorization in another member state. That left the exchange without the EU-wide authorization required for normal crypto-asset service provision once the relevant transitional period ended. Binance maintains that it is complying with applicable requirements and continues to pursue MiCA authorization.
Reverse Solicitation Becomes the Regulatory Fault Line
MiCA Article 61 permits a third-country company to provide crypto services when an EU customer approaches it entirely on the customer’s own initiative. The exemption stops applying when the provider, an affiliate or someone acting for it solicits, promotes or advertises services to that customer in the Union. ESMA has repeatedly described reverse solicitation as an exceptionally narrow carve-out rather than an alternative licensing model for maintaining a European customer base.
That interpretation places the details of Binance’s customer relationships under scrutiny. The Financial Times reported that some services for European customers have been routed through Binance’s Abu Dhabi-regulated entity, while regulators in France, Germany and Greece have questioned how the exchange is using reverse solicitation. An Abu Dhabi authorization does not itself provide permission to solicit customers inside the EU, because MiCA treats an ADGM-regulated business as a third-country provider for European purposes.
The issue extends beyond Binance. ESMA this week called for stronger powers to deal with third-country firms that solicit EU investors without MiCA authorization, highlighting regulators’ concern that offshore providers could undermine the new licensing perimeter. Europe is therefore moving from implementing MiCA toward testing whether its restrictions can actually be enforced against large global platforms. That pressure comes as policymakers are already considering how the EU framework may evolve beyond its original MiCA design.
Greece provides a useful contrast. The country has since added BCASH, Xenios Blockchain Group, Capital Wallet Greece and Piraeus Bank to ESMA’s register, establishing its first group of MiCA-regulated crypto providers. Those registrations show the passporting route Binance is still trying to secure: authorization through one competent EU authority can provide access across the wider single market.
Enforcement Depends on How Binance Reached EU Customers
The current scrutiny does not establish that Binance has violated MiCA. Regulators would need to examine how individual customers were onboarded, what marketing or communications they received and whether the relevant services genuinely resulted from their exclusive initiative. The legal test turns on solicitation and customer acquisition, not simply on the fact that an EU resident can technically access an offshore platform.
If authorities conclude that the exemption was used to maintain ordinary commercial operations without authorization, Binance could face national enforcement measures, including restrictions or financial penalties. The episode also comes while the exchange faces unrelated compliance scrutiny elsewhere, including a reported U.S. investigation into possible Iran-sanctions violations. Those proceedings are legally separate and should not be treated as evidence that Binance breached MiCA.
The political controversy surrounding Binance’s earlier Greek application is separate as well. A September report alleged that ECB President Christine Lagarde had intervened against the application, while HCMC later denied that its officials made the statements attributed to them or communicated with ECB officials on the matter. Binance ultimately withdrew before Greece issued a formal approval or rejection, leaving the licensing outcome unresolved rather than formally denied.
For European regulators, the Binance case cuts directly into one of MiCA’s most consequential enforcement problems. A passportable authorization has value only if firms without one cannot recreate comparable access through broad interpretations of reverse solicitation or offshore entities. How regulators apply Article 61 to Binance’s actual customer acquisition and servicing practices will show whether MiCA’s third-country boundary works as a meaningful licensing perimeter or remains vulnerable to regulatory arbitrage.
