The largest cryptocurrency exchange Binance is facing significant regulatory uncertainty in Europe. The company claims that its license application under MiCA rules has passed the Greek regulator’s review and has been deemed compliant. However, Reuters, citing its sources, reported that European regulators are preparing to reject the application. If this were to actually happen, Binance might not be able to legally provide services to clients in the European Union from July 1.
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Binance claims its application meets MiCA requirements
Binance stated in a Tuesday blog post that the Greek Capital Market Commission, known as the Hellenic Capital Market Commission, has completed its review of the application and considers it compliant with the requirements of the European MiCA regulation. According to the exchange, the process is now subject to further assessment at the level of the European Securities and Markets Authority, or ESMA.
The statement came shortly after Reuters reported that Binance’s EU license may be at risk. According to the agency, regulators are preparing to reject the application, which would mean a major complication for the exchange just days before the expiration of the European regulation’s transitional period.
Binance did not comment directly on the Reuters report itself. A company spokesperson told Cointelegraph that the exchange expects ESMA to continue the licensing process and move it toward authorization at one of the upcoming meetings. The company also stated it would update users again by June 30 at the latest.
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Why the MiCA license is so important for Binance
MiCA, or Markets in Crypto-Assets, is a unified European framework for regulating cryptocurrency services. Crypto exchanges and other digital asset service providers must obtain authorization in one of the EU member states. This subsequently allows them to provide services across the entire bloc.
Binance submitted its license application in Greece in January. If the Greek regulator HCMC were to actually reject it, the exchange would likely not be able to legally continue serving European clients from July 1. The end of June is a key deadline for many cryptocurrency firms, as the option to operate in the EU without full authorization under MiCA expires after that date.
Some other companies have already obtained licenses in countries such as Germany or the Netherlands. This increases pressure on Binance, which serves a considerable number of users in Europe and ranks among the most visible players in the entire market.
Exchange warns of weakened liquidity and departure of activities from Europe
Binance emphasized in its statement that any delay or complication in the licensing process would not only impact the company itself. According to the exchange, it could weaken liquidity, reduce competition, limit choices for users, and push part of activities, jobs, investments, and tax revenues outside the European Union.
In other words, Binance is trying to frame its case not just as a matter for one company, but as an issue of the European cryptocurrency market’s competitiveness. If the world’s largest exchange had to limit its services for European clients, it could, according to the company, change trading conditions and the availability of certain services.
For regular users, the most important thing for now is to monitor whether Binance announces a clear plan for continued operations in the EU by the end of June. If the license were not granted, the exchange would likely have to present how it will proceed with European clients, including possible service restrictions or user migration.
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Binance still dealing with pressure from US authorities
The European licensing troubles come at a time when Binance remains under scrutiny in the United States as well. In 2023, the company reached a settlement with US authorities, in which then-CEO Changpeng Zhao stepped down from leadership and pleaded guilty to one criminal charge. Binance also agreed to a $4.3 billion settlement with the US Department of the Treasury and Department of Justice and committed to a monitoring program.
The exchange has recently come under renewed scrutiny from US lawmakers over questions surrounding sanctions compliance. According to available reports, they are asking, among other things, about allegations that funds connected to sanctioned entities may have flowed through the platform.
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