ESMA Warns EU Crypto Clients Must Use MiCA-Licensed Entities as Binance Faces Scrutiny

The European Securities and Markets Authority has told Cointelegraph that crypto clients within the EU must be serviced through a Markets in Crypto Assets Regulation authorized entity once the bloc’s transitional deadline passes on July 1. Crypto asset service providers operating across the EU and European Economic Area are required to hold MiCA authorization, with protections under the framework applying only to licensed entities.

Binance Adjusts Services Across Several Countries

The clarification follows Binance’s announcement that it was modifying its EU operations in Poland, France, Spain and Italy as part of its MiCA transition, while stating users elsewhere would not need to act unless based in a jurisdiction with a local registered entity.

Reverse Solicitation Exemption Has Limits

ESMA noted that non-EU providers can only avoid licensing requirements under a narrow reverse solicitation exemption, which applies solely when clients initiate contact without any marketing or promotion involved.

Reports suggesting some EU users could be served through Binance’s Abu Dhabi Global Market entity drew criticism from legal experts, who noted Abu Dhabi licensing carries no weight under MiCA since it’s treated as a third-country jurisdiction.