Financial Times claims that EU regulators are once again questioning Binance. They suspect the exchange is using a legal loophole to still serve European users.
BeInCrypto asked Binance about this, and it turns out they are still actively pursuing MiCA authorization.
“Binance complies with applicable regulatory requirements in the jurisdictions in which it operates… We are actively working toward becoming MiCA-authorised,” the exchange’s spokesperson said.
How is Binance Still Operating in the EU?
The rule in question is called reverse solicitation. A crypto exchange cannot advertise or provide services in the EU without a MiCA licence. But if a user personally hears about the exchange and uses it, then it’s legal.
Think of a restaurant that may serve you only if you walked in uninvited. If it advertised to you, the exemption is gone.
Binance is using this loophole to serve some EU customers through its Abu Dhabi entity, according to the FT.
“The exemption should be understood as very narrowly framed and as such must be regarded as the exception,” reads an excerpt in the guidelines.
Binance’s Second European Setback Since June
Binance pulled its Greek license application on June 24, before any ruling. Reports indicated that European Central Bank (ECB) President Christine Lagarde pushed Greece to reject the bid. Greece’s regulator denied that its officials made the comments attributed to them.
On September 30, ESMA asked the European Commission for stronger powers over non-EU firms that court EU investors without a license.
No regulator has announced a decision on Binance. The exchange has not said when it expects a license.