Binance is relying on a narrowly defined exception
Since July 1, Binance’s position in Europe has become significantly more complicated. BrefCrypto previously explained how MiCA is turning crypto compliance into a genuine market in Europe. For exchanges, compliance now requires CASP authorization, which can then allow them to operate across the Union.
Binance did not secure that authorization before the end of the transitional period.
The exchange had filed its application in Greece before withdrawing it at the end of June. Binance says the Greek regulator had completed its review and found the application compliant with MiCA requirements, while also stating that it now intends to pursue authorization in another member state.
In the meantime, Binance is relying in part on reverse solicitation.
Article 61 of MiCA does provide for this possibility: when a European client independently and exclusively solicits a service provider based in a third country, that provider may deliver the requested service without a MiCA license.
However, the official ESMA text on Article 61 adds a major restriction: if the company previously solicited, promoted or advertised to that client in the Union, it can no longer present the relationship as having been initiated exclusively by the consumer.
A simple tick box or contractual clause is not enough either.
Europe wants to know who actually solicited whom
This is precisely where regulators are beginning to take a closer look.
According to Reuters, citing information from the Financial Times, ESMA and authorities in several European countries are examining how Binance continues to serve clients after the end of its transitional regime. Regulators have requested additional information, and sanctions remain possible if certain activities are deemed incompatible with MiCA.
The case therefore turns on a seemingly simple question: did the client genuinely come on their own?
ESMA has already warned that reverse solicitation must be interpreted “very narrowly.” Its guidelines explain that it must not become a way for companies from third countries to circumvent the obligation to obtain a European license. Advertising, influencers, social media campaigns, website redirects and affiliated entities may all be considered in the analysis.
The issue is particularly sensitive for Binance because of its size and its history in Europe.
Before MiCA, the exchange held several national registrations, including in France. For French users, Binance said that from July 1, the services of Binance France would be progressively limited to transactions enabling users to reduce positions and withdraw assets.
This situation illustrates the shift described by BrefCrypto in its analysis of European regulation: the EU is now seeking less to let each country define its own approach and more to impose a genuinely unified regulatory market.
If reverse solicitation is used too broadly, that objective would quickly lose some of its purpose.
MiCA faces its first major enforcement test
For Binance, the case does not yet amount to a Europe-wide ban.
The company says it complies with the applicable regulations and continues to work toward obtaining MiCA authorization. It has also strengthened its regulatory presence outside the Union, notably in Abu Dhabi, where it now holds a comprehensive set of authorizations under the ADGM framework.
The risk is instead that Europe will progressively close the avenues that allow companies to continue serving clients without a full license.
MiCA is clear on the general principle: a company may provide crypto-asset services professionally in the Union only if it is authorized, except in the specific cases set out in the regulation. Once authorized in a member state, however, a CASP can use that passport to serve the entire European market.
For competitors that are already authorized, the issue is also economic. A platform subject to MiCA’s capital, governance, asset custody and compliance requirements would struggle to compete if a foreign player could offer the same services while using reverse solicitation on a much broader basis.
That is why ESMA also regards the issue as a risk of unfair competition.
BrefCrypto previously reported that Bitcoin Suisse had obtained a MiCA license in Liechtenstein, allowing it to expand its services across the European Economic Area. Other exchanges have taken the same route. For Binance, the absence of authorization is therefore becoming more visible as its competitors secure their European passport.
This case will probably be one of MiCA’s first real tests of strength after the transitional periods end.
European law provides a narrow door for a client who independently chooses a foreign service. What regulators are now seeking to prevent is that this door becomes a main entrance through which millions of Europeans can be served without going through the MiCA licensing process.
