EU officials are questioning crypto exchange Binance over its use of reverse solicitation, a legal exemption, to keep serving customers in the bloc despite a failed licence bid and an order to wind down its EU business.
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The Financial Times reported the questioning today (Thursday), citing people familiar with the matter. ESMA, the EU's markets watchdog, and national regulators, including those in France, Germany and Greece, are examining Binance's use of the exemption, and some have requested information from the company.
The sources said enforcement action, including fines, is possible if regulators are not satisfied. One of them said that other, smaller companies are also being examined.
Dr. George Theocharides, former chair of the Cyprus Securities and Exchange Commission (CySEC), said: “Reverse solicitation has been a controversial topic for some time now and affects all type of markets and entities. Reverse solicitation is acceptable on a limited scale but under specific and strict conditions.”
“Unfortunately in the past we have seen cases of firms, using the pretext of reverse solicitation, trying to circumvent the product intervention measures placed on CFDs and other speculative products in Europe. We are seeing this issue now with Binance and cryptos where they have millions of customers in Europe and plan to continue servicing them without having a MiCA license.”
“It is a fact though that Binance has used active solicitation for many years to onboard those clients. It remains to be seen the outcome of the negotiations with ESMA an other regulators. If Binance wants to have a MiCA or MiFID license in the future in Europe, needs to work on this issue and cooperate with European regulators.”
What the Rules Require
Under MiCA, the EU's crypto rulebook, unlicensed firms should have begun winding down EU operations from 1 July and stopped serving customers other than to help them transfer or sell holdings.
Reverse solicitation allows non-EU firms to serve EU customers who seek the relationship entirely on their own initiative.
ESMA said the exemption "should be regarded as the exception" and not used to circumvent MiCA. The Dutch regulator AFM said providers "cannot simply claim reverse solicitation." Both declined to comment on Binance specifically, as did regulators in Germany, France and Greece.
Binance said it complies with applicable regulatory requirements in the jurisdictions where it operates, and that it is "actively working toward becoming MiCA-authorised." The exchange announced on 24 June that it was withdrawing its MiCA application in Greece to pursue authorisation in another member state. Gillian Lynch, its head of Europe and the UK, told Reuters that "Binance is not leaving Europe."
Binance's local licences in France, Spain and Poland have lapsed under MiCA.
According to a user in Austria and two people familiar with the matter, customers elsewhere are served by Binance's Abu Dhabi-regulated entity, which has held authorisation since December 2025. The user said nothing had changed for them.
In EU countries where it never held local licences, Binance operates under reverse solicitation, one source said. The source added that customers are onboarding of their own volition without being marketed to, and that the company does not want to grow this way long term. Another person said multiple regulators are asking on what basis customers were reverse solicited.
Binance was fined a record $4.3bn in the US in 2023 and pleaded guilty to criminal charges related to money laundering and sanctions breaches.
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A Familiar Route for CFD Brokers
Reverse solicitation is also used by many CFD brokers to offer services in a range of countries. Usually, brokers regulated in offshore jurisdictions “reverse solicit” clients from almost any country, with the likely exception of the United States.
Many public CFD brokers have even revealed that jurisdictions where they do not have any local license and onboard clients under “reverse solicitation” are their largest markets.
The reverse solicitation towards offshore entities is also popular among traders in heavily regulated Europe and Australia because of the strict leverage restrictions.
