ESMA and National Regulators Scrutinize Binance’s Reliance on ‘Reverse Solicitation’ Exemption in the EU, FT Reports
By Unchained
AI summary of the source article
The European Securities and Markets Authority alongside national watchdogs in France, Germany, and Greece are questioning Binance over how it serves EU customers following its failure to secure a license under the Markets in Crypto Assets (MiCA) regime. The scrutiny focuses on reverse solicitation, a narrow exemption allowing non-EU firms to serve European clients who initiate contact unprompted. Regulators have requested information from Binance and may pursue enforcement action, including fines, if dissatisfied with the exchange's answers. Binance stated that it complies with applicable regulatory requirements and is actively working toward becoming MiCA-authorized.
Why it matters
If regulators are not satisfied with Binance's response regarding its use of the reverse solicitation exemption, the exchange could face enforcement action, including fines.
Key facts
- ESMA and regulators in France, Germany, and Greece are scrutinizing Binance's use of reverse solicitation to serve EU users.
- Unlicensed firms were required to take immediate steps to wind down EU operations starting July 1 under the MiCA regime.
- Regulators have requested information and could impose enforcement measures, including fines, if Binance's response is unsatisfactory.