The European Union is scrutinizing Binance’s use of reverse solicitation, a legal loophole that allows unlicensed crypto firms to serve EU customers without a local license. Regulators, including ESMA and national authorities in France, Germany, and Greece, are examining whether the exchange has abused the exemption to maintain operations despite a failed license bid and a wind-down order under the EU’s MiCA rules.
The probe follows reports that Binance continues to onboard EU customers through reverse solicitation, where clients initiate contact without direct marketing. Under MiCA, unlicensed firms were required to cease EU operations by July 1, except for assisting with asset transfers. ESMA has warned that reverse solicitation should be an exception, not a way to bypass compliance. The Dutch regulator AFM echoed this, stating that firms cannot simply claim the exemption without scrutiny.
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Binance has denied wrongdoing, asserting it complies with regulations and is working toward MiCA authorization. The exchange withdrew its Greek license application in June to pursue approval in another EU state. Meanwhile, its local licenses in France, Spain, and Poland have lapsed, leaving customers in those countries reliant on Binance’s Abu Dhabi-regulated entity, authorized since December 2025, rather than a direct EU-based service.
Regulators are pressing for clarity on how Binance identifies reverse solicitation cases. Sources say some customers in countries where Binance never held a license remain active, though the company has stated it prefers not to grow this segment long-term. The scrutiny comes after Binance’s $4.3 billion US fine in 2023 for money laundering and sanctions violations, raising questions about its compliance elsewhere.
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