Binance, MiCA, and the Reverse Solicitation Question
EU regulators are scrutinising whether Binance is using a narrow MiCA exemption as a structural workaround rather than the limited carve-out it was designed to be. The European Securities and Markets Authority (ESMA), alongside national watchdogs in France, Germany, and Greece, is examining Binance's reliance on the so-called reverse solicitation provision to keep serving European customers without a full MiCA authorisation. For accounting firms, auditors, and CFOs advising crypto-active clients across the bloc, the developing situation carries real compliance and due-diligence consequences.
What the Reverse Solicitation Exemption Actually Allows
MiCA creates a single licensing regime for crypto asset service providers (CASPs) operating inside the European Union. It also includes a narrow carve-out: a non-EU CASP may serve a customer in the EU if that customer approaches the provider entirely on their own initiative, with no prompting or solicitation from the firm. This is the reverse solicitation provision.
Where the line falls
ESMA's published guidelines draw a firm boundary around this exemption. A non-EU provider cannot rely on it to build ongoing commercial relationships, extend its service offering, or effectively replace a full authorisation with a passive but recurring customer flow. The exemption was designed for genuinely isolated, customer-initiated transactions, not a scalable servicing model. ESMA's position is that using reverse solicitation as a substitute for authorisation is a circumvention of MiCA's requirements, not a legitimate use of the rule.
How Binance is reported to be using it
According to reporting by the Financial Times, cited by Cointelegraph, Binance has been relying on reverse solicitation to continue serving some EU customers following the end of MiCA's transitional period on 1 July 2026. A separate strand of the arrangement reportedly routes some EU traders through Binance's entity regulated in Abu Dhabi. Binance told Cointelegraph it "complies with applicable regulatory requirements" and confirmed it is pursuing MiCA authorisation, describing its commitment to operating in Europe on a long-term compliant basis. The exchange had previously indicated that EU access would depend on account status and servicing entity.
The Regulators Involved and What Each Has Said
The scrutiny spans three national competent authorities (NCAs) alongside ESMA itself, reflecting the cross-border nature of Binance's EU customer base.
ESMA
ESMA told Cointelegraph it does not comment on specific cases. It also clarified that supervision, investigation, and enforcement of CASPs under MiCA rest with national authorities, not ESMA directly, though the agency coordinates and sets guidelines. Separately, ESMA published a call for stronger powers over non-EU firms that solicit European investors without MiCA authorisation, as part of its formal response to the European Commission's ongoing MiCA review consultation. ESMA stated that its proposals would support faster and more consistent supervisory action across the bloc while reducing the scope for firms to exploit gaps between national regimes.
BaFin, AMF, and HCMC
Germany's Federal Financial Supervisory Authority (BaFin) declined to comment, citing legal confidentiality obligations. France's Autorité des marchés financiers (AMF) and Greece's Hellenic Capital Market Commission (HCMC) had not responded to Cointelegraph by the time of publication. The silence from all three NCAs is itself informative: active investigations or confidential supervisory dialogue typically prevent public comment.
ESMA's non-compliant CASP register
ESMA's register of non-compliant crypto providers grew from 164 entries on 16 July to 173 entries as of 30 September 2026. Binance does not currently appear on that register. ESMA describes the register as "non-exhaustive" and updates it based on information supplied by NCAs, so absence from the list does not confirm regulatory clearance. It indicates only that no NCA has notified ESMA of a non-compliance finding at this time.
Why ESMA Is Pushing for More Powers Now
The timing of ESMA's call for enhanced supervisory authority is not coincidental. ESMA Chair Verena Ross stated on 30 September that the regulator's focus is shifting from rulemaking toward supervision and convergence. That language signals a deliberate change of gear: the rules are largely set, and the next phase is enforcing them consistently across 27 member states.
The supervisory gap MiCA currently leaves
Under the current MiCA architecture, ESMA does not directly supervise most CASPs. That responsibility sits with the NCA of the member state where the CASP is authorised, or, for non-EU firms, with whatever NCA has jurisdiction over the relevant national market. This creates an inherent coordination problem when a large non-EU exchange serves customers across multiple member states simultaneously. ESMA's proposed powers would give it stronger tools to act against non-EU firms exploiting this fragmentation. For firms advising clients in this space, understanding that supervisory structure matters: a finding in one member state does not automatically trigger action in others, but ESMA's convergence agenda is designed to close that gap.
Accounting and Due Diligence Implications for Firms
The regulatory uncertainty around a major exchange's EU legal status creates concrete obligations for accounting practices, auditors, and CFOs. These are not abstract compliance concerns.
Counterparty risk assessments
If a client holds assets on, or transacts through, an exchange whose EU legal basis is under active regulatory scrutiny, that exposure belongs on the risk register. A CASP operating under reverse solicitation that is subsequently found to be in breach of MiCA could face regulatory action, potential restrictions on EU activity, or enforcement proceedings. Any of those outcomes could impair client access to assets or affect transaction settlement. Auditors need to assess whether clients are relying on a counterparty whose operational continuity in the EU is uncertain, and whether that uncertainty is material to the financial statements.
AML and KYC documentation
MiCA does not displace the Anti-Money Laundering Directive. A CASP operating under reverse solicitation is still subject to AML obligations in the jurisdictions where it actually serves customers. If a client's counterparty CASP is later found to have been operating without proper authorisation, there is a question about whether the AML and KYC chain of custody was intact. Firms conducting client risk assessments should document the regulatory status of key CASPs in client portfolios, not just at onboarding but on a rolling basis.
Record-keeping and the servicing entity question
Binance's reported structure, routing some EU customers through an Abu Dhabi-regulated entity, raises a specific accounting and legal question: which entity is the actual counterparty for contract law, tax, and AML purposes? For clients holding assets with Binance, the legal entity on the terms of service determines jurisdiction for dispute resolution, insolvency ranking, and the applicable AML regime. Firms using digital asset accounting software to track client positions need to ensure the legal entity is captured accurately, not just the exchange brand name. That distinction could matter significantly if a regulatory event changes the terms under which the entity serves EU clients.
Disclosure considerations
For corporate clients with material crypto holdings, the regulatory status of custodians and trading counterparties may need to be assessed for disclosure purposes. If there is genuine uncertainty about whether a counterparty will retain uninterrupted access to EU markets, that uncertainty may be relevant to going concern assessments, notes to the financial statements, or risk factor disclosures in regulated filings. The nature and extent of any required disclosure will depend on materiality and the applicable reporting framework, but auditors should be asking the question now rather than after a regulatory event forces the issue.
What This Means for MiCA Compliance Strategy
The Binance situation is the most prominent test case for reverse solicitation under MiCA, but it is unlikely to be the last. Any non-EU CASP currently serving EU customers under that exemption should treat this episode as a stress test of their own legal analysis.
Reviewing reverse solicitation reliance
Accounting and legal advisers working with clients that operate or invest through non-EU CASPs should review how those CASPs characterise their EU customer relationships. A CASP that offers ongoing account management, actively communicates product updates, or systematically extends services to EU customers is unlikely to meet the threshold for genuine reverse solicitation. If the legal basis is fragile, clients should be informed of the regulatory risk and contingency planning should begin.
The authorisation queue
Several large exchanges are in various stages of MiCA authorisation across different member states. Firms advising clients should track which entities have received authorisation, which are in process, and which have no active application on file. ESMA's non-compliant register, though non-exhaustive, provides one reference point. National competent authority registers in Germany, France, Greece, and other member states provide additional data. Maintaining a live picture of counterparty authorisation status is now a baseline due-diligence requirement for any firm with significant crypto exposure.
For context on how ESMA has framed its broader supervisory priorities ahead of 2027, our earlier coverage of ESMA's MiCA review response on DeFi, stablecoins, and compliance sets out the regulatory direction of travel in detail. The Greek dimension of this story also connects to our earlier reporting on Greece's first MiCA entrants and the Binance controversy, which covers the HCMC's position and the broader political context in that jurisdiction.
Frequently Asked Questions
What is the MiCA reverse solicitation exemption?
It allows a non-EU crypto asset service provider to serve an EU customer without MiCA authorisation, but only when that customer initiates contact entirely on their own initiative, with no solicitation or marketing from the provider. ESMA's guidelines make clear it cannot be used as a substitute for authorisation or to build systematic customer relationships.
Does Binance's absence from ESMA's non-compliant register mean it is cleared?
Not necessarily. ESMA describes the register as non-exhaustive and updates it based on information from national competent authorities. Absence from the list reflects the current state of NCA notifications to ESMA, not a positive regulatory clearance. Active supervisory processes are typically confidential and would not appear on the register until an authority decides to notify ESMA.
Which national regulators are reportedly involved?
ESMA, BaFin in Germany, the AMF in France, and the HCMC in Greece are all reported to be examining the matter. BaFin declined to comment due to legal confidentiality. The French and Greek authorities had not responded to press inquiries by the time of publication.
What should accounting firms do right now?
Firms should map which non-EU CASPs their clients use, check whether those CASPs hold MiCA authorisation or a pending application, document the legal entity on client account agreements, and flag any material counterparty risk in ongoing audit and risk assessment work. Rolling counterparty status reviews should be built into standard client file procedures for any client with crypto exposure.
Could regulatory action against Binance affect client asset access?
Potentially, yes. If a regulator were to restrict or suspend a CASP's ability to serve EU customers, client access to assets held on that platform could be disrupted during any transition period. The risk is not certain, but it is material enough to assess for clients with significant holdings and to factor into asset safeguarding advice.
Source: Cointelegraph