European regulators are questioning Binance over its use of a narrow legal exemption to keep serving EU customers without a licence, the Financial Times reported. Binance told Euronews it is working towards authorisation, while ESMA said enforcement is a matter for national authorities.
The world’s largest cryptocurrency exchange is under scrutiny from EU watchdogs for continuing to serve clients in the bloc, months after it was told to wind down its European business, according to a report by the Financial Times on Thursday.
Binance failed to secure a licence this summer under the Markets in Crypto-Assets Regulation (MiCA), the EU’s rulebook for the sector. Unlicensed companies were expected to take “immediate steps” to wind down their EU operations from 1 July and to serve customers only to help them transfer or sell their crypto holdings.
The European Securities and Markets Authority (ESMA), the EU’s markets watchdog, and national regulators in countries including France, Germany and Greece are now examining how Binance uses “reverse solicitation”, the FT reported, citing people familiar with the matter.
The legal exemption allows companies based outside the EU to serve customers in the bloc as long as those customers seek out the service entirely on their own initiative.
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