European Union regulators are questioning Binance over its continued provision of cryptocurrency services to customers in the bloc despite an order to wind down its EU operations, the Financial Times reported on Thursday, citing people familiar with the matter.
The scrutiny centers on Binance’s use of a “reverse solicitation” exemption, which can allow non-EU financial firms to serve customers when the relationship is initiated entirely by the customer. EU regulators have stressed that the exemption is narrowly defined and cannot be used to circumvent licensing requirements under the bloc’s Markets in Crypto-Assets (MiCA) rules.
Binance’s authorization to operate across the EU was affected after it failed to secure a MiCA license earlier this year. Several regulators have reportedly requested information from the exchange, with possible enforcement action, including fines, if authorities are not satisfied with its explanations.
Binance said it complies with applicable regulatory requirements and is working toward obtaining MiCA authorization. The European Securities and Markets Authority has not commented specifically on the Binance case.
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