EU regulators are reviewing whether Binance can keep serving some European customers under a legal exemption after the exchange failed to secure a MiCA license. The Financial Times reports that ESMA and regulators in France, Germany and Greece are examining Binance's use of the "reverse solicitation" rule, with enforcement possible if they reject its interpretation.
European regulators are reportedly questioning whether Binance can keep operating in parts of the EU under an exemption, after the exchange failed to win a MiCA license this summer. Enforcement action is possible if they reject its interpretation of the rule.
Regulators Weigh the Reverse Solicitation Exemption
The Financial Times, citing people familiar with the matter, reported that the European Securities and Markets Authority and regulators in France, Germany and Greece are reviewing whether Binance qualifies for MiCA's "reverse solicitation" exemption. That exemption would let Binance continue serving customers who approach it on their own initiative, rather than through active solicitation.
Binance was ordered to wind down its EU business after it failed to secure a license this summer. Under the rules, unlicensed firms were supposed to take immediate steps to wind down from July 1 and stop serving customers, other than to help them transfer or sell their holdings.
In June, Binance had said it had worked with regulators for about 18 months and had received no formal sign of rejection. But it later withdrew an application in Greece and stated it would pursue authorization in another member state.
An ECB President's Alleged Intervention
Another report from the Wall Street Journal alleged that European Central Bank President Christine Lagarde personally asked Greek Prime Minister Kyriakos Mitsotakis to block Binance's application after Greek regulators had all but approved it. By early June, the application had cleared its technical review, and the mandatory 40-day assessment period had ended without objections.
Her reasoning traced back to the exchange's earlier guilty plea to US money-laundering and sanctions violations. She also worried that admitting Binance would push more people toward dollar-denominated stablecoins while the ECB works on a digital euro.
The outcome of the reverse-solicitation review will determine whether Binance can keep serving customers in some of these EU markets at all.
Source: CryptoPotato
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