Binance’s EU services face scrutiny over licensing exemption: Report
EU regulators are reportedly examining Binance’s use of a MiCA exemption to serve customers as ESMA seeks stronger enforcement powers.
European regulators are reportedly scrutinizing Binance’s use of a legal exemption to continue serving customers in the European Union without authorization under the bloc’s crypto rules.
The European Securities and Markets Authority (ESMA) and regulators in France, Germany and Greece are examining Binance’s use of reverse solicitation under the Markets in Crypto-Assets Regulation (MiCA), the Financial Times reported on Thursday.
Binance withdrew its Greek MiCA application in June and said it would seek authorization in another EU member state.
Binance told Cointelegraph on Sept. 18 that it continues pursuing MiCA authorization and remains committed to operating in Europe on a long-term compliant basis.
Binance is relying on reverse solicitation to continue serving some EU customers, the report said, citing a person familiar with the matter.
The exemption allows non-EU crypto asset service providers (CASPs) to serve customers who approach them entirely on their own initiative, but ESMA’s guidelines stress that companies cannot use it to circumvent MiCA requirements.
Related: Binance disappears from Google Play in certain EU countries
Ahead of the end of MiCA’s transitional period on July 1, Binance told Cointelegraph that EU access would depend partly on a user’s jurisdiction, account status and “servicing entity.” Some EU traders are now being served through Binance’s Abu Dhabi-regulated entity, according to the FT.
Binance did not confirm whether it was in talks with EU regulators, telling Cointelegraph that it “complies with applicable regulatory requirements.”
ESMA on Wednesday called for stronger powers over non-EU companies that solicit European investors without MiCA authorization in its response to the European Commission’s consultation on reviewing the regulation.
ESMA said its proposals would support faster, more consistent supervisory action across the EU and reduce opportunities for companies to exploit regulatory differences.