Regulators Claim Binance Uses Legal Exemption to Keep EU Operations

European Union regulators are once again raising concerns about Binance, according to the Financial Times. Authorities suspect the exchange is exploiting a legal loophole to continue providing services to users in the region. 

When asked by BeInCrypto, Binance confirmed it is still actively seeking authorization under MiCA. 

“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.

FT: EU Regulators Scrutinize Binance’s Use of MiCA Exemption

Binance, the world’s largest crypto exchange, is under scrutiny from EU regulators over its use of MiCA’s “reverse solicitation” exemption to continue serving some European customers after failing to secure a license,…

— Wu Blockchain (@WuBlockchain) October 1, 2026

How is Binance Still Operating in the EU?

The mechanism at the center of the debate is known as reverse solicitation. Without a MiCA licence, a crypto exchange is barred from advertising or actively offering services across the EU. However, if a user independently learns about the platform and decides to use it, that activity remains legal.

An analogy would be a restaurant that can only serve someone if that person arrives without being invited. Once advertising occurs, the exemption no longer applies.

According to the FT, Binance is taking advantage of this exception by routing some European clients through its Abu Dhabi-based entity.

“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

On June 24, Binance withdrew its application for a Greek license before any decision was reached. Reports suggest European Central Bank President Christine Lagarde encouraged Greece to reject the bid, though Greek regulators denied making such statements.

On September 30, ESMA asked the European Commission to grant it stronger authority over non-EU companies that solicit EU investors without proper licensing.

No regulatory body has yet announced a verdict regarding Binance. The exchange has not provided a timeline for when it expects to obtain a license.