Binance’s EU services face scrutiny over licensing exemption: Report

European supervisors are reported to be probing Binance’s use of a MiCA exemption that permits non-EU crypto asset service providers to serve customers who approach them without solicitation. The Financial Times, citing a person familiar with the matter, said ESMA and national regulators in France, Germany and Greece are scrutinizing Binance’s invocation of reverse solicitation to maintain services for some EU users without a full MiCA authorization. Binance withdrew its MiCA application in Greece in June and has said it intends to seek authorization in another EU member state. The company told Cointelegraph on Sept. 18 that it remains in the process of pursuing MiCA approval and is committed to long-term compliance in Europe. Some EU traders are reportedly being served via Binance’s Abu Dhabi-regulated entity, and the firm previously said access for EU users could depend on factors such as jurisdiction, account status and the servicing entity. ESMA has signaled a desire for more direct enforcement tools against non-EU firms that solicit European investors without MiCA authorization. In its response to the European Commission’s consultation on reviewing MiCA, ESMA argued for stronger powers to enable faster and more consistent supervisory actions across member states and to reduce scope for regulatory arbitrage. ESMA chair Verena Ross has indicated the regulator is shifting emphasis from rulemaking to supervision and convergence under MiCA. ESMA’s public register of non-compliant crypto providers rose from 164 entries on July 16 to 173 in the Sept. 30 update. Binance does not appear on that list, which ESMA describes as non-exhaustive and compiles based on input from national competent authorities. ESMA told Cointelegraph it does not comment on specific cases and noted that national authorities handle supervision, investigation and enforcement under MiCA. German regulator BaFin cited legal confidentiality and declined further comment; French and Greek authorities had not responded by the time of publication.