Since July 1st, Binance can no longer operate as a crypto-asset service provider within the European Union, having failed to obtain the mandatory authorization required under the MiCA regulation. The European Securities and Markets Authority (ESMA), along with France, Germany, and Greece, have opened an investigation into the platform’s possible exploitation of a regulatory loophole to continue serving millions of European users. This loophole, known as “reverse solicitation,” allows crypto companies established outside the EU to offer their services to European clients only if the clients themselves initiate the contact. ESMA stated that this exemption must be interpreted very restrictively and should not be used to circumvent MiCA requirements. If Binance’s liability is established, the exchange could face coercive measures, including fines.
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