Binance accounts opened in France and four other countries despite the absence of a MiCA license

The locking of the European crypto market with MiCA is already showing flaws. Indeed, the Binance exchange perhaps thinks it has found loopholes. Despite the entry into force of this new regulatory framework, it is still possible for European citizens to open functional accounts without a MiCA license thanks to the world’s first crypto exchange platform. Such a scenario would therefore become a life-size test for the credibility of this standard and the future of international exchanges on the old continent.

Sandmark investigation and validation of registrations on Binance

While the MiCA regulation came into force on 1^er July, the definitive conclusions released by the crypto analysis platform Sandmark revealed this affair. This August 19, the experts of this firm carried out live registration tests from various member countries of the European Union such as Germany, Austria, Belgium, Spain and France. They used standard connections as well as virtual private networks (VPN). So, this experiment allowed them to see that the exchange was still accepting new clients from Europe without the imposition of strict geo-blocking or the issuance of the slightest alert on its regulatory status.

The exchange has fully validated two accounts subject to full identification (KYC) procedures. This validation thus unlocks full access to all financial transactions and mainly to the receipt of crypto deposits. Such discoveries come at a time when the exchange had previously withdrawn its application for MiCA approval from the Greek authorities, contenting itself with sending notifications to its users in order to reassure them about the security of their money and the possibility of making withdrawals.

This scenario surprised many observers. Indeed, the latter expected on an operational and technical level a rigorous territorial blockage of the infrastructure of the Binance platform. Without a clear wording of a warning about the lack of MiCA license when opening the account, the exchange allows European users to start business relationships in complete freedom.

Testers noticed a simplified registration process. This procedure demonstrates that no automated filter prevents the arrival of euro zone citizens. The continuity of the service is complete given the permanent access to the various mechanisms for depositing funds into these new confirmed accounts. This situation is therefore contrary to the withdrawal dynamic that the exchange was supposed to operate after its adjustments relating to regional regulations.

THE major findings The results of this survey are summarized as follows:

• Total territorial accessibility: effective validation of accounts from five countries of the European Union;
• An unrestricted KYC process: the complete absence of a warning message regarding the lack of MiCA approval during the registration procedure;
• Financial services immediately operational: maintaining all key functionalities, including direct deposit of cryptos into new validated accounts.

The orderly withdrawal requirement and the position of the exchange

The posture of the European Securities and Markets Authority (ESMA or ESMA) is completely firm with regard to these practices. Therefore, the European Union regulator has published unambiguous guidelines. These recommendations require unauthorized companies to take immediate steps to terminate their various services within the EU in an organized manner, while safeguarding the interests of customers and providing guarantees against risks of undermining market integrity.

Your strict instructions would imply the interruption of registrations of European customers, the creation of new accounts, as well as any marketing approach from 1^er July. Regarding these alleged breaches, the Binance platform affirms that it still aims to continue its activities in Europe. This is why it continues to take steps to comply with European standards. The exchange said: “Following the implementation of MiCA, we have taken steps to ensure that the availability of our products and services in Europe is aligned with applicable legal and regulatory frameworks”.

This institutional reaction demonstrates the desire to maintain a strategic presence in this high-potential market of several hundred million solvent consumers. By alleging invisible internal adaptations to comply with the texts, the company is trying to preserve its image as an important and legitimate player playing with the ESMA implementation schedule. This gap between official comments based on long-term compliance and the reality relating to registrations calls into question the room for maneuver that the crypto firm still has in the face of the coercive power of the EU regulator.

The start of financial sanctions and the prospects of escalation

This rigorous position of European regulation is already manifested in a concrete way on the ground via direct financial penalties which affect other actors. Thus, on August 14, the Austrian Financial Markets Authority (FMA) imposed a fine of 70,000 euros on the Bitpanda exchange for violations relating to notification and marketing obligations under MiCA.

This case shows that national financial police take action as soon as they notice a failure to comply with various solicitation or information standards. From this perspective of total inflexibility, the operational privileges provided put non-compliant exchanges in a precarious legal situation in relation to national jurisdictions.

The continued access of customers established in Europe to unapproved services announces a progressive and inevitable tightening of controls in the weeks to come. If industry behemoths like Binance continue to maintain their user flows without a MiCA license, regulators would quickly impose financial fines and sweeping sanctions measures such as targeted blocking of IP addresses or cutting off fiat banking rails. For crypto investors, this legal loophole considerably increases the risks of liquidity and access to their tokens.