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FollowingEU regulators investigate Binance's application of MiCA's reverse solicitation exemption clause
European regulators are reviewing whether Binance relies too broadly on the "reverse solicitation" exemption clause in the Cryptographic Asset Markets Regulation (MiCA) to continue to serve some EU customers without obtaining an EU-wide crypto license.
According to people familiar with the matter, the European Securities and Markets Authority (ESMA) and national regulators in countries such as France, Germany and Greece are reviewing Binance's use of the exemption clause, and some regulators have asked the exchange to provide relevant information. If authorities determine that the relevant conditions have not been met, enforcement actions, including fines, may be taken.
Reverse solicitation: Required to be initiated by the customer
According to MiCA regulations, a third-party national company can only provide encryption services without EU authorization if the customer proactively contacts a company out of its own exclusive will. Any advertising, promotion or solicitation to EU customers will remove this protection, and contract language claiming that the relationship was initiated by the customer cannot override the actual situation.
In addition, the exemption does not allow a third-party company to use a customer-initiated request as a license to market new cryptographic assets or additional services to that customer. ESMA's reverse solicitation framework views this avenue as a narrow exception to Section 59, which typically requires companies providing crypto services within its territory to hold a MiCA authorization.
Binance FZE's terms of service clearly reserve the right to provide services in other jurisdictions based on the principle of reverse solicitation. Although the entity is regulated by the Dubai Virtual Assets Authority (VARA), the authorization does not give it the right of passage for MiCA passports within the EU.
Binance continues to seek MiCA authorization
After setbacks, Binance has not yet obtained an EU-wide Crypto Service Provider (CASP) license. In its application to withdraw from Greece, the company said it would seek authorization in other member states and maintain its long-term European presence.
The review comes as EU regulators move from the MiCA implementation phase to stricter regulation. At the same time, ESMA is separately seeking a broader MiCA framework that covers decentralized financial (DeFi) access providers, pledges, lending, and enhanced enforcement tools for unauthorized third-party national companies.
Binance stated that it complies with applicable regulatory requirements and is actively working to obtain MiCA authorization. As of October 1, no public enforcement decisions against the exchange regarding reverse solicitation have been announced.
