Binance’s EU Business Under Scrutiny as Regulators Probe “Reverse Solicitation” Under MiCA

European regulators are reportedly looking at whether Binance has been using a legal exemption to keep serving EU customers after failing to obtain a MiCA license. For crypto PSPs and exchanges, the detail that matters is simple: if regulators decide “reverse solicitation” has been stretched beyond its narrow lane, enforcement could follow.

1. According to a Financial Times report on Thursday, the European Securities and Markets Authority (ESMA) and regulators in France, Germany and Greece are probing Binance’s use of “reverse solicitation.” The practice allows firms based outside the European Union to offer financial services to EU customers only if those customers initiate the relationship entirely on their own.
2. Under the European Union’s Markets in Crypto Assets (MiCA) regulation, unlicensed crypto firms were required, as of July 1 of this year, to take immediate measures to wind down their EU business. The FT report says Binance had been ordered to wind down after failing to obtain a license, but has continued operating in the region via the exemption.
3. Sources familiar with the matter told the FT that regulators have requested information from Binance and could move to enforcement action, including fines, if they are not satisfied with the response. One source said regulators are also reviewing other, smaller companies, which is usually the part of the story people remember only after the first fine lands.
4. ESMA said the reverse solicitation exemption “should be understood as very narrowly framed” and “should be regarded as the exception and not be used to circumvent MiCA requirements.” Binance said it “complies with applicable regulatory requirements in the jurisdictions in which it operates” and that its “products and services continue to be reviewed and aligned with relevant regulatory obligations.”
5. Binance also said it is “actively working toward becoming MiCA-authorized” and sees that as a step toward “providing users with a consistent, regulated, and trusted service across the European market.” For high-risk operators, the practical takeaway is that EU market access is moving from ambiguity toward authorization, and regulators are already testing how tightly firms are reading the exception clauses.

MiCA was designed to replace piecemeal guidance and enforcement-led oversight with a framework covering crypto exchanges, stablecoin issuers and consumer protections. In other words: fewer gray areas on paper, and more of them getting litigated in practice.