ESMA probes Binance over EU customers served without a MiCA license

ESMA has asked Binance to explain how it is servicing European customers under the MiCA “reverse solicitation” exception, a narrow carve-out that allows an offshore company to deal with an EU client only if the client came to the platform on their own. For high-risk PSPs, the point is not the crypto politics; it is the line between a defensible exception and a licensing problem that regulators can fine.

1. Under MiCA, the EU crypto rulebook, a company registered outside the EU can serve European customers without a MiCA license if the client initiated the relationship without the company’s marketing pushing them onto the platform. In practice, that means a user in an EU country starting to use Binance and opening an account on their own may fall into the exception, at least on paper.
2. MiCA came fully into force on 1 July 2026, and crypto companies operating in EU countries were required to secure a license by the end of June. This summer, Greek authorities refused to grant Binance permission to operate in the EU, and France also denied the exchange a license.
3. ESMA has requested information from Binance. If the exchange’s explanations do not satisfy the regulator, ESMA can sanction the company, including by imposing fines. The authority said reverse solicitation has very narrow application and should be treated as an exception, not as a way to bypass MiCA requirements.
4. Binance said publicly that it complies with the laws of the jurisdictions where it operates. The exchange is already carrying regulatory baggage that matters in any licensing discussion: in 2023, US authorities fined it $4.3 billion for money laundering and violations of international sanctions rules.
5. Changpeng Zhao, Binance’s owner, served a four-month sentence in a US maximum-security prison in 2024 after admitting that he had failed to properly establish customer identification (KYC) procedures at the exchange. In March, the Federal Court of Australia imposed a A$6.9 million administrative penalty on Binance Australia Derivatives.