The European Securities and Markets Authority (ESMA) has warned that crypto clients in the European Union must be serviced through a Markets in Crypto-Assets Regulation (MiCA)-authorized entity after the July 1 transitional deadline. The clarification adds to scrutiny of how global exchanges like Binance can continue to operate in the region.
In a statement to Cointelegraph, an ESMA spokesperson said that EU clients should be serviced through a MiCA-authorized legal entity, and that MiCA protections apply only to entities licensed within the EU. The statement came shortly after Binance informed users in Poland, France, Spain, and Italy that it was adjusting services as part of its MiCA transition.
Non-EU crypto asset service providers (CASPs) can only serve EU customers under a narrow exemption called reverse solicitation, defined in Article 61 of MiCA. Under this rule, an EU client must initiate the relationship entirely on their own, without any solicitation, marketing, or promotion by the company.
ESMA has provided guidance on what constitutes solicitation, including operating websites, mobile apps, social media, online advertising, sponsorships, and influencer campaigns targeting EU users. The regulator emphasized that if a third-country firm solicits clients, it cannot claim the reverse solicitation exemption.
Confusion arose after screenshots of Binance customer support messages suggested that some EU users might be serviced through Binance’s Abu Dhabi Global Market (ADGM) entity. Lawyer Yuriy Brisov from Digital & Analogue Partners said that an Abu Dhabi license has no effect under MiCA, as the jurisdiction is treated as a third country.
Brisov noted that the reverse solicitation exemption is designed for isolated cases where an EU customer independently approaches a non-EU firm, not for maintaining an existing customer base built through years of marketing. Binance did not respond to repeated requests for clarification on whether any EU users would be serviced through its ADGM entity after the MiCA deadline.
The development comes as Europe approaches the MiCA implementation deadline, with Germany leading the race for crypto authorization under the new framework. The regulatory shift is expected to reshape how global exchanges serve EU clients.