European regulators are investigating Binance regarding its continued operations within the European Union. Despite failing to secure a license under the new Markets in Crypto-Assets (MiCA) regulation, the exchange has maintained services for local users.
The MiCA framework required crypto firms to obtain authorization by the end of June to operate legally within the EU starting in July. Binance had previously seen its license application rejected earlier this year, which threatened access for millions of users.
The investigation, led by the European Securities and Markets Authority (ESMA) and national regulators, focuses on the exchange's use of the reverse solicitation exemption. This legal provision allows non-EU firms to provide services only if clients initiate the contact independently.
ESMA officials have emphasized that the reverse solicitation clause is intended as a narrow exception rather than a loophole for bypassing regulatory requirements. Regulators have requested detailed information from Binance regarding its practices.
If the company's response is deemed insufficient, authorities may pursue enforcement actions, including the imposition of fines. Binance stated that it is actively working to obtain MiCA authorization and remains committed to complying with local regulatory requirements.
