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ESMA and three EU regulators probe Binance's MiCA reverse-solicitation claim

ESMA with France, Germany and Greece examine whether Binance's Abu Dhabi entity serves EU customers lawfully under MiCA Article 61 after it lost its registrations July 1.

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The European Securities and Markets Authority and the national regulators of France, Germany and Greece are examining whether Binance can continue serving EU customers out of its Abu Dhabi entity on the basis of MiCA's reverse-solicitation exemption, the Financial Times reported on October 1. The probe, surfaced by Decrypt, puts a specific legal question around a workaround Binance has leaned on since July 1, when its last EU registrations lapsed under MiCA's transitional regime.

What happened

Binance failed to secure a MiCA licence by the June 30, 2026 deadline. Its registrations in six member states — France, Italy, Lithuania, Poland, Spain, and Sweden — expired, and on July 1, 2026 Binance stopped onboarding new customers out of its EU-registered entities. It did not stop serving EU residents. Instead, access routed through Binance's Abu Dhabi FSRA-licensed entity, authorised in December 2025, invoking MiCA Article 61 — the "reverse solicitation" exemption that lets non-EU firms serve EU clients when the client initiated the relationship on their own exclusive initiative.

ESMA has published guidelines framing Article 61 as narrow:

"This exemption must be understood as very narrowly framed and must not be used to circumvent MiCA requirements."

The FT reports the four-regulator examination is specifically about whether Binance's marketing surface — social media, sponsorships, referral programmes, influencer activity — breaches the "exclusive initiative" test that voids the exemption.

Mechanism — what Article 61 actually permits

MiCA Article 61 is a reciprocity carve-out: it exists so that an EU resident who deliberately opens an account at a non-EU firm, on that resident's own initiative, is not thereby forcing the non-EU firm into MiCA scope. ESMA's December 2024 Q&A and the subsequent 2026 guidelines sharpen that:

  • Any solicitation, advertisement, promotion, event sponsorship, or targeted social-media campaign aimed at EU residents voids the exemption for the entire client base reached by the solicitation.
  • The burden of proof is on the firm. Documentation must evidence that the client, not the firm, initiated contact.
  • Products offered under reverse solicitation are constrained to those the client requested; the firm cannot upsell a new MiCA-scope service on top.

A finding that Binance's EU-facing marketing voided the exemption would not just reach the Abu Dhabi routing — it would reopen the question of whether servicing continued at all after July 1.

Impact

Binance's Richard Teng and Europe/UK head Gillian Lynch have publicly maintained that the firm "respects applicable regulatory requirements in jurisdictions where it operates, while actively working toward MiCA authorisation." The exchange disclosed on September 22 a $100M strategic investment in Circle, which the market read as positioning for a licence conversation; the Abu Dhabi relay is the operational bridge in the meantime.

Three concrete pressure points:

  1. Enforcement powers. National regulators have discretionary tools short of a formal ESMA conclusion — AMF in France, BaFin in Germany, HCMC in Greece can each unilaterally restrict Binance marketing, order payment-rail disconnections, or compel disclosure of customer onboarding records. These moves do not need an ESMA finding.
  2. The MiCA register. EU customers acquired under reverse solicitation after July 1 are not Binance EU customers in any national register. A regulator finding that the exemption did not apply retroactively leaves those customers in a legal grey zone that typically resolves against the firm.
  3. Christine Lagarde's September intervention. The WSJ reported on September 18 that the ECB president pressed the Greek prime minister on Binance's position, after which Binance withdrew its Greek licence application on June 24. The political line into this file now runs through the ECB.

Numbers

- Deadline MiCA transition : 2026-06-30
- Binance EU registrations lost : France, Italy, Lithuania, Poland, Spain, Sweden
- Abu Dhabi authorisation : December 2025 (FSRA)
- Reported EU customers (France only) : ~2 million (per Journal du Coin)
- Circle investment : $100M (announced 2026-09-22)
- Regulators probing : ESMA + France + Germany + Greece
- Legal lever : MiCA Article 61 (reverse solicitation)
- FT disclosure : 2026-10-01

What to watch

  1. A formal ESMA opinion. Article 61 enforcement to date has produced warnings and national-level actions. An ESMA-level opinion specifically about Binance would be the first use of its MiCA convergence powers on a specific CASP.
  2. Any national pre-emptive action. AMF has previously banned Binance marketing in France (2023); the question is whether it reimposes equivalent measures under MiCA.
  3. Binance's licensing path. Public positioning now says Binance is pursuing a MiCA licence; which member state hosts the application, and how much of a clean break from the Abu Dhabi routing it requires, is the next observable data point.

Pattern

This is the third major MiCA enforcement question of 2026 after the July deadline passed with 194 authorised CASPs on the ESMA register — small compared to the pre-MiCA EU VASP population. ESMA's September review called for tightening the DeFi, staking and lending carve-outs; the Binance file now extends that tightening to the reverse-solicitation lane.

Sources

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