Binance has been locked out of the European Union’s crypto market on paper for almost two months, although in reality millions of its European users remain on the platform.
Under the EU’s Markets in Crypto-Assets (MiCA) Regulation, crypto-exchange operators wishing to serve customers in the EU had to obtain authorization from a national regulator by July 1, 2026, or wind down their operations in the region.
Binance failed to meet the deadline. After Reuters reported that the relevant regulatory authority was unlikely to approve its bid, Binance withdrew its license application in Greece on June 24, just days before the deadline — although the company disputes that account.
The exchange said that it had pulled its application voluntarily in order to give users ‘more clarity’ as it works to obtain authorization elsewhere, reportedly in France.
The effects were immediately apparent, at least on the surface. Binance halted new registrations and informed users in France, Italy, Poland, and Spain that their access would be restricted. Yet the continued activity on the platform points to strong demand for crypto services in Europe, even as the crypto heatmap — and the BTCUSD chart in particular — shows signs of turbulence.
In France alone, where Binance says it serves about 2 million people, customers lost the ability to engage in spot and margin trading but were still allowed to withdraw their funds. Coinbase and OKX, both of which already held MiCA licenses, swiftly moved to attract displaced traders.
However, the wind-down seems to have been incomplete. On August 19, Sandmark, a crypto analysis firm, tested Binance’s onboarding process seven weeks after the deadline, using accounts in Austria, France, Germany, Spain, and Belgium, both with and without VPNs.
In several cases, its researchers were able to open and fully verify new accounts and deposit money without receiving any notice that Binance was not authorized under MiCA. As of August 20, Binance did not appear on the list of about 330 companies formally authorized by ESMA.
Binance told Sandmark that it had taken measures to ensure its products complied with applicable legal frameworks in Europe, even though it did not address the specific gap identified by the tests. It is not the only company in this position: MEXC and HTX also remain accessible to users in the EU despite not holding their own licenses.
One of the reasons for the gap is how enforcement works in practice. Although ESMA maintains a public registry designed to identify non-compliant providers, as of mid-August only three of the thirty national supervisory authorities in the EU had submitted any entries to it.
Germany’s BaFin, one of the bloc’s most active regulators, was not included in the list. Although the rule is clear in principle — no license means no service — enforcement in practice depends on whether a national regulator decides to investigate and act.
Binance’s difficulty in obtaining a license goes beyond administrative hurdles. Under MiCA, regulators are required to evaluate whether an applicant’s management and shareholders satisfy “fit and proper” criteria, and Binance continues to face scrutiny stemming from its $4.3 billion US settlement in 2023, as well as founder Changpeng Zhao’s guilty plea in that case.
Zhao subsequently resigned as CEO, and Binance’s European leadership says he no longer holds a management position, though regulators are reported to have continued examining his influence over the company.
The difficulties experienced by Binance are part of a broader consolidation. Of the approximately 1,100 to 1,300 crypto companies operating in Europe before MiCA came into full effect, only about 200 — around 15% — managed to obtain licenses.
For now, Binance continues to state that a French license is expected “in the coming months”. Nevertheless, millions of users are not waiting to find out; they are still using the app.
This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.