European regulators have begun investigating Binance's use of exemptions under the Markets in Crypto-Assets Regulation (MiCA) to continue serving clients in the European Union without proper authorization. The European Securities and Markets Authority (ESMA), along with regulators in France, Germany, and Greece, are examining how Binance applies reverse solicitation to work with clients in the EU, reported the Financial Times on Thursday. Binance withdrew its MiCA application in Greece in June and stated it would seek authorization in another EU country. The company told Cointelegraph on September 18 that it continues to pursue MiCA approval and intends to operate legally in Europe in the long term.
Reverse solicitation allows non-EU crypto-asset providers to serve clients who approach them solely on their own initiative. However, ESMA guidelines emphasize that companies cannot use this mechanism to circumvent MiCA requirements. Before the MiCA transition period ended on July 1, Binance told Cointelegraph that EU access would depend on the user's jurisdiction, account status, and 'servicing structure.' According to FT, some European traders are now served through a Binance structure regulated in Abu Dhabi. Binance has not confirmed whether it is in discussions with EU regulators, stating only that it 'complies with applicable regulatory requirements.'
ESMA calls for expanded powers. On Wednesday, ESMA urged for broader powers over non-EU companies that attract European investors without MiCA authorization. This is part of its response to the European Commission's consultation on regulatory review. ESMA stated that its proposals would ensure faster and more consistent supervisory responses across the EU and reduce opportunities for companies to exploit regulatory differences. The call came after ESMA head Verena Ross stated on Monday that MiCA's focus has shifted 'from rule-making to supervision and convergence of practices.'
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