Binance Faces MiCA Scrutiny: What It Means for ADA

European regulators are questioning how Binance continues to serve EU customers without MiCA authorization, the Financial Times reported on October 1. The inquiry centers on “reverse solicitation,” an exemption for services initiated exclusively by the customer. Reuters said it could not independently verify the reported inquiries.

Binance Withdrew Its Greek MiCA Application

Binance withdrew its application for MiCA authorization in Greece on June 24 and said it would apply in another EU member state. The company said the Greek regulator had issued no formal decision.

According to the Financial Times, Binance had been told to wind down its EU business after failing to secure authorization. Regulators are now seeking explanations about services it continues to provide. No penalty or formal decision concerning its use of reverse solicitation has been publicly announced.

The Limits of Reverse Solicitation

MiCA allows a firm outside the EU to provide a service when a customer requests it entirely on their own initiative. The exemption does not apply if the firm, or someone acting on its behalf, solicited that customer through advertising or other promotion.

An initial request also does not give the firm unrestricted permission to market new types of assets or services. ESMA’s guidance calls for regulators to examine the actual circumstances of each relationship, including online activity aimed at European customers. The reported inquiry concerns whether Binance’s ongoing services fall within those limits.

What It Means for ADA Holders

No restriction specifically targeting ADA trading has been announced in connection with the reported inquiry. Binance said in June that customer assets would remain accessible and that it would contact users affected by changes to its European services.

Any resulting restrictions would concern access to exchange functions in particular countries or accounts. ADA held in a personal wallet remains under its holder’s control on Cardano. For assets held on Binance, the practical detail will be which trading, conversion and withdrawal services the company is permitted to offer to each EU customer.