European Union and national regulators are questioning how Binance continues to serve customers in the bloc through “reverse solicitation,” Reuters reported on October 1, citing the Financial Times. Binance said it complies with applicable requirements and is “actively working toward becoming MiCA-authorised.”

The scrutiny follows the July 1 end of MiCA’s maximum transitional period, which had allowed some providers to keep operating under national arrangements while seeking authorisation. Coindoo’s earlier reporting on Binance’s Greek licence bid described its application as withdrawn in June, leaving the exchange without the authorisation it had sought. The Reuters report arrived three months after that deadline.

Reverse solicitation offers a limited route for serving EU customers outside that licensing framework. Whether it applies depends on how the customer reached the provider and which service was requested — details that may be invisible to someone simply opening an app to trade.

Clicking “sign up” does not settle who approached whom

The Markets in Crypto-Assets regulation, known as MiCA, is the EU’s authorisation framework for crypto-asset service providers, and it allows an EU customer to approach a firm outside the bloc independently and request a crypto service. Under Article 61, that specific service can qualify for an exception to authorisation. Ordinary retail customers can use it; an EU-based provider cannot invoke it to escape licensing requirements.

The circumstances of the approach are decisive. Imagine one customer independently contacting an overseas exchange to request a service, while another opens an account after following the exchange’s targeted advertisement. Both complete registration themselves, but the advertisement matters when assessing whether the second request arose exclusively from the customer’s initiative. This hypothetical illustrates the rule; it is not an allegation about Binance’s marketing.

The European Securities and Markets Authority’s guidelines, published in February 2025, require that history to be assessed on the facts. A customer declaration cannot override evidence that the firm prompted the approach. “Contractual arrangements or disclaimers cannot supersede contrary facts.”

That assessment also extends to promotion by affiliates or people acting on the provider’s behalf. An independent review is treated differently, depending on the firm’s involvement. The distinction prevents an exchange from avoiding scrutiny simply by having someone else promote its services.

An existing relationship is not permission to sell everything

For a customer who genuinely approached the provider independently, the exception can accommodate more than a one-off trade. ESMA’s final report, published in December 2024, explains that an ongoing relationship may continue when the originally requested service requires one, and that relationship has no fixed expiry date.

The limits fall on marketing additional products. A provider cannot use the original request to promote new types of crypto assets or services. Even promotion of the same type must remain within the context of the original transaction, rather than treating the account as permanent permission for future offers.

A customer’s interest in one service therefore does not establish that they independently sought every product available through the platform. Assessing continued access requires attention to what the relationship actually covers, rather than assuming that an account opened voluntarily makes all later activity eligible.

An open app does not prove MiCA authorisation

Access can also continue after a provider loses permission to operate normally for a separate reason: customers need a way to leave. In its June 23 wind-down statement, ESMA told unauthorised providers to stop recruiting EU customers and restrict remaining services to an orderly exit. Selling assets, transferring holdings and closing positions can form part of that process, and custody may continue only as long as necessary to complete it.

Withdrawal access consequently does not demonstrate permission to offer routine trading. Account notices should explain whether remaining functions support an exit or whether the provider claims another basis for continuing the service.

To understand that basis, users need the company name in their account agreement. A brand may operate through several legal entities, and authorisation held by one does not automatically cover the others. Reverse solicitation applies only to firms outside the EU, making the identity of the provider particularly important.

That name can be compared with the ESMA MiCA register, alongside the services for which the company is authorised — information more useful to customers than a general claim that an exchange complies with regulation somewhere in the world. The difference affects the protections surrounding their holdings. ESMA warns that customers of unauthorised providers do not benefit from MiCA safeguards, including protections for client assets, and continued access should not be mistaken for those protections.

The reported scrutiny does not establish a breach by Binance. Its practical consequence will depend on whether accept the basis for continued service or require changes. Binance’s stated work toward MiCA authorisation provides a parallel marker to watch: a successful application would place the operating entity on the ESMA MiCA register, alongside the services it is authorised to provide. Customers would then need clear notice of how their accounts are affected, particularly if trading access becomes restricted to closing positions and moving assets.

This article is for informational purposes only and does not constitute legal or investment advice.