Binance Stays in the EU Through Workarounds Despite Not Obtaining MiCA License
Bloomberg reports that Binance, the world's largest cryptocurrency exchange, continues to operate in the EU's 27 countries months after failing to obtain a license under the EU's Markets in Crypto-Assets Regulation (MiCA). The company is relying on various loopholes and workaround arrangements to onboard new customers and reroute trades, with insiders stating that the company is confident about remaining in the EU.
Starting July 1, platforms without a license from any member state must exit in an orderly manner. Binance withdrew its application in Greece in June without waiting for a formal rejection; at that time, European business head Gillian Lynch stated, "We are not leaving Europe," and will reapply in another country. The Financial Times indicated that France is being considered as the next destination. The focus of the Greek review includes anti-money laundering measures and whether founder Changpeng Zhao can pass the appropriate person test. The company had previously notified users in Poland, Italy, Spain, and France to withdraw funds and halted some new account openings. As of early September, the European Securities and Markets Authority still had no record of Binance being authorized. In the same period, companies like Coinbase, Kraken, and OKX obtained licenses, with about 210 out of over 3,000 European crypto firms being approved.
France still has an ongoing judicial investigation against the company but has been chosen as a potential reapplication site. Regulators are concerned about its penalty record, cross-border structure, and risk culture. If Binance uses offshore entities, reroutes traffic, or accepts flows through non-EU accounts during the unlicensed period, it would be precisely the shadow channels that the regulation aims to eliminate. The company claims that assets can still be withdrawn and expects to obtain a license in the coming months.
Buyers are EU traders who want to continue using a deep order book, while sellers are regulators who impose strict thresholds on single licenses. The driving force behind this situation is that the platform remains online even after the deadline. Licensed competitors benefit, while unlicensed giants that treat "upcoming approval" as an operating license are under pressure.
Source: Public Information
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Binance's withdrawal of its application in Greece is framed as "not receiving a rejection," and France is positioned as the next port of call, effectively trading time for users to avoid relocating. The design of MiCA allows for approval by one country to enable operation across the entire union, and conversely, a rejection by one country can halt operations across the union; the giant is betting it can always find the next capital willing to negotiate. Zhao Changpeng's appropriate person test incorporates the founder's history into the licensing process, a threshold that traditional brokers are accustomed to but crypto exchanges have yet to digest. The "side door" mentioned by Bloomberg essentially reclassifies EU residents as non-EU traffic.
The capital pathway is the network effect of the order book: if users stay, fiat channels and market makers will also remain, giving leverage for future negotiations. Licensed platforms are using compliance premiums to attract migrations; Binance maintains user stickiness through continuous withdrawals and limited functionality. France's selection despite ongoing investigations indicates the company's belief that political and judicial matters can be handled separately, while regulators see this as the reason for Greece's failure.
A comparable situation is Binance's multiple instances of "leaving a country and returning with a new domain" after 2018, as well as traditional investment banks using third-country subsidiaries to continue operations after passport invalidation. The industry is transitioning from a registration system gap to a single-license enforcement phase, with the largest exchanges becoming test cases for regulatory effectiveness.
Structurally, this falls under regulatory changes. The mechanism is that after the transition period ends, the days themselves constitute a state of illegality, and workaround paths rewrite illegality from "operating" to "technically servicing overseas clients." Licensing pricing power resides with member state regulators, not trading volume rankings.
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- The largest exchanges can also operate without a passport, but cannot claim that a lack of one will soon be rectified.
- A rejection by one country halts operations across the union; an approval by one country allows for operations across the union.
- Side doors can retain the order book but cannot retain legal identity.