Binance is facing regulatory scrutiny from the European Union after continuing to serve customers in the bloc without securing authorization under the Markets in Crypto-Assets (MiCA) framework. According to the Financial Times, the exchange is relying on a regulatory loophole known as reverse solicitation to maintain access for some European users.
The European Securities and Markets Authority (ESMA) and national regulators are now examining whether Binance exceeded what that exemption permits. The exchange has been asked to provide information about the legal basis for its continued EU services, and it could face enforcement measures as well as financial penalties if regulators conclude it overstepped.
Binance was expected to wind down its EU operations after failing to secure a license through Greece before the MiCA transition period ended on July 1. The company withdrew its Greek application when approval appeared unlikely and warned affected European users that services would be restricted. However, some EU customers still report being able to trade through Binance entities based outside the European Union, including what some describe as an Abu Dhabi-based business. Binance secured full authorization from the Financial Services Regulatory Authority of Abu Dhabi Global Market in December 2025.
The dispute is emerging as a significant test for MiCA, which was designed to make crypto regulation less fragmented across the EU. If offshore exchanges can continue serving EU customers through reverse solicitation, that structure could be weakened. Binance has responded by saying it complies with requirements in relevant jurisdictions and reiterated that it is still working to become MiCA-authorized.
