Stories
Binance Under Scrutiny in Europe Over Unlicensed Operations, FT Reports
- •European Union officials are questioning crypto exchange Binance Holdings Ltd. regarding its continued operations in Europe without a license.
- •Binance reportedly continued onboarding European customers using a "reverse solicitation" provision after failing to secure a Markets in Crypto-Assets Regulation (MiCA) license in Greece.
- •The European Securities and Markets Authority, along with regulators in France, Germany, and Greece, are investigating Binance's use of the reverse solicitation rule.
- •Under EU crypto rules, unlicensed entities were required to begin winding down local businesses from July 1 this year.
- •Binance stated it complies with regulatory requirements and is actively working towards MiCA authorization, while facing fresh challenges after past regulatory troubles and a $4.3 billion fine in the US.
Key Questions Answered
European Union officials and regulators in countries like France, Germany, and Greece are questioning Binance because the crypto exchange continued to onboard European customers using a "reverse solicitation" provision after failing to acquire a Markets in Crypto-Assets Regulation (MiCA) license earlier in the year.
The "reverse solicitation" provision is a rule allowing clients to independently seek out overseas financial providers. Binance has used this rule to continue onboarding European customers after failing to secure its MiCA license in Greece.
In 2023, Binance agreed to pay $4.3 billion in fines and penalties in the US for failing to implement adequate anti-money laundering controls. Additionally, founder Changpeng Zhao pleaded guilty to similar charges and was later pardoned by President Donald Trump.
