European securities regulators are investigating how Binance has retained its customers across the European Union. ESMA, alongside national authorities from France, Germany, and Greece, has stepped in to probe the crypto exchange for continuing to offer full services to users despite failing to secure a Markets in Crypto-Assets (MiCA) license.
Since MiCA rules took effect on July 1, 2026, unlicensed firms are supposed to only help European clients transfer or liquidate their assets. Binance took a different route by relying on the “reverse solicitation” clause under Article 61 of MiCA. This clause is specifically intended as an exemption for crypto services provided purely at the exclusive initiative of the client.
Abu Dhabi Route Replaces Six Local Licenses
Customers outside countries where Binance holds local registrations are now served through its Abu Dhabi entity. This Middle Eastern entity received official authorization in December 2025 and became an operational pillar after the company’s local European permits lapsed. Previously, Binance secured registrations in six EU member states: France, Italy, Lithuania, Poland, Spain, and Sweden. All of those local licenses have now expired under the MiCA regulatory framework.
Binance’s efforts to obtain new licenses in Europe have also faced setbacks. The company withdrew its MiCA application in Greece in June 2026. This retreat came just a week after Reuters reported that Greek regulators were preparing to reject their license application.
ESMA Warning on Narrow Exemption
Authorities warned that the client-initiative exemption is not an operational workaround. ESMA stressed that the reverse solicitation loophole carries “very narrow” restrictions and must not be used under any circumstances to bypass mandatory MiCA requirements. The Dutch regulator (AFM) issued a similar statement, emphasizing that crypto entities cannot merely claim reverse solicitation without meeting strict criteria.
In response to the probe, a Binance spokesperson stated that the exchange remains compliant with applicable regulations and is still actively pursuing MiCA authorization. The investigation by European regulators is not limited to major industry players, however. The same authorities are reportedly investigating smaller crypto firms suspected of using similar tactics. Tightening regulatory scrutiny is forcing the European crypto sector to fall in line toward full compliance.
Reported via Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
