Many European regulators are demanding explanations from the Binance exchange on the continuation of its services within the European Union without MiCA approval. There “reverse solicitation” is among the questions. This is an exemption that the platform would invoke to serve certain European customers from a structure located outside the EU.
In brief
- Binance does not yet have MiCA approval valid throughout the European Union.
- Several regulators are examining the continuation of certain services accessible to European customers.
- The use of reverse solicitation is at the heart of the questions.
- This exemption can only apply if the customer contacts the platform themselves.
- Binance claims to comply with the rules and continues its application for MiCA authorization.
Binance and MiCA: the key points of the file
If they have not had authorization in accordance with the MiCA regulation, providers who no longer benefit from the transitional regime must cease their activities in the European Union from 1er July 2026. The Binance exchange platform has not yet obtained this approval, however certain customers would continue to have access to its services.
According to the information providedthe French, German and Greek authorities are among the regulations examining this situation. Their questions mainly relate to the conditions under which the exchange uses reverse solicitation.
Here are the main elements of the file:
- Binance does not yet have MiCA approval allowing it to offer its services throughout the European Union;
- Its old national authorizations in France, Spain and Poland do not replace the new European license;
- Some customers would be served by a Binance entity regulated in Abu Dhabi;
- Supervisors seek to determine whether customers actually contacted the platform on their own initiative;
- Misuse of the exemption would result in enforcement action or financial sanctions.
Thus, a user of Austrian nationality has underlines that “nothing has changed” for him and that he could still acquire, transfer and exchange cryptos. This continuity calls into question how Binance applies these new European directives.
Reverse solicitation remains a very narrow exception
MiCA gives the possibility to a company located outside the European Union to offer a service to a European investor if the latter has requested it on their own initiative. However, such an exception does not represent a general solution for continuing to provide services without a license.
An exchange cannot approach customers, actively promote its products in its country or use intermediaries to solicit investors. Nor can it immediately evoke reverse solicitation simply because a user visits its platform.
The European Securities and Markets Authority reminds SO : “the reverse solicitation exemption should be understood to be very narrowly defined”. According to ESMA, it must remain the exception and not be used to circumvent MiCA obligations.
For its part, Binance confirms that it complies with applicable regulatory requirements. The exchange is actively working towards obtaining MiCA authorization. Requests for information made by supervisors do not, at this stage, represent a conviction or proof of an offense.
ESMA wants to strengthen powers linked to MiCA
This case comes at a time when ESMA is calling for a review of certain aspects of MiCA. The authority proposed consolidated powers against third country structures that solicit European investors without authorization in its September 30 response to a European Commission consultation.
The supervisor also wants to allow the authorities the possibility of blocking fraudulent platforms and carrying out a rapid freeze of cryptos suspected of being linked to money laundering, terrorist financing or market manipulation. He also calls for more transparency on costs and stricter supervision of promotion by influencers.
These changes have not yet been adopted. They represent recommendations addressed to the Commission as part of the review of MiCA. ESMA explains this progression by the slowness of current procedures, because when a freeze occurs, suspect assets have sometimes already disappeared.
Binance has yet to obtain its MiCA approval
The MiCA Regulation currently relies on national supervision. A company obtains its license from the authority of a member country, then uses this passport to offer its services in the 27 countries of the Union.
This system has triggered fears of differences between regulators, as some companies may favor more flexible jurisdictions. ESMA’s new proposals therefore aim to harmonize controls and limit the possibilities of circumvention.
Binance is continuing its application for approval, but no public timetable has been communicated. Until then, the exchange will have to demonstrate that the services still accessible to European customers strictly respect the limits of reverse solicitation. The outcome of the case could also set a precedent for other foreign platforms that continue to serve the European market without a MiCA license.
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