Binance keeps working in the EU inspite supposed blockade

[alani123]

It almost seems like binance didn't mind to go rogue until MiCA implementation in the EU.

Their app was delisted from the play store in Europe and their former bank accounts closed
Binance went ahead and listed an installation file on their website and opened new banking services.

Now the full exchange works without interruption including EUR deposits and withdrawals even after not receiving a MiCA license.
Now banking for EU clients is completed through Georgian bank accounts. Not an EU country, neither in EUR, but banks are very friendly to foreign currency nevertheless.

Georgia has a pending application for participation in the SEPA scheme. Will be interesting to see how long EU tolerates that a Georgian bank offers EUR banking access to binance.

But it's also always interesting to see what binance have up their sleeve to avoid regulation.

[zasad@]

It almost seems like binance didn't mind to go rogue until MiCA implementation in the EU.

Their app was delisted from the play store in Europe and their former bank accounts closed
Binance went ahead and listed an installation file on their website and opened new banking services.

Now the full exchange works without interruption including EUR deposits and withdrawals even after not receiving a MiCA license.
Now banking for EU clients is completed through Georgian bank accounts. Not an EU country, neither in EUR, but banks are very friendly to foreign currency nevertheless.

Georgia has a pending application for participation in the SEPA scheme. Will be interesting to see how long EU tolerates that a Georgian bank offers EUR banking access to binance.

But it's also always interesting to see what binance have up their sleeve to avoid regulation.

Whoever wrote the new MiCA law likely left this loophole. Binance isn't violating anything, the exchange doesn't operate in Europe and doesn't advertise its services there. And if Europeans themselves wish to use Georgian intermediaries to trade on the exchange from the UAE or other offshore jurisdictions, that's not prohibited.

[Faisal2202]

It almost seems like binance didn't mind to go rogue until MiCA implementation in the EU.

But it's also always interesting to see what binance have up their sleeve to avoid regulation.

Binance has ball knowledge haha, they always find a workaround. Like in the US case, they were restricted from providing their services when they were forced to leave the US, but they were routing US citizens via VPNs etc. to their global exchange, that was right under their nose and the loophole was there for regulation to see but they did not fail. The operation was probably not that big to be caught up by the regulation there, that's why they were able to work with this for a while, but eventually got caught.

They did the same in the 2017 China ban, they left China and moved to Japan, FSA warned Binance, so they shifted to Malta. Then Malta also raised concerns about the license, they said we did not have any headquarters here haha.

Now this one in the EU is just phenomenal, I have to say they have ball knowledge and I am really impressed. But of course eventually they will be forced out, but I am more excited to see their next workaround.

[alani123]

It almost seems like binance didn't mind to go rogue until MiCA implementation in the EU.

But it's also always interesting to see what binance have up their sleeve to avoid regulation.

Binance has ball knowledge haha, they always find a workaround. Like in the US case, they were restricted from providing their services when they were forced to leave the US, but they were routing US citizens via VPNs etc. to their global exchange, that was right under their nose and the loophole was there for regulation to see but they did not fail. The operation was probably not that big to be caught up by the regulation there, that's why they were able to work with this for a while, but eventually got caught.

They did the same in the 2017 China ban, they left China and moved to Japan, FSA warned Binance, so they shifted to Malta. Then Malta also raised concerns about the license, they said we did not have any headquarters here haha.

Now this one in the EU is just phenomenal, I have to say they have ball knowledge and I am really impressed. But of course eventually they will be forced out, but I am more excited to see their next workaround.

Currently you don't need a VPN to access binance. If you had an account in the EU, even with a verified address, they're happy to let you trade and even deposit and withdraw EUR via Georgia.

It does look like they're in direct violation of MiCA. Just trying to stay out of EU's enforcement doesn't mean that they aren't breaking the rules by providing services to EU citizens. It's interesting they keep breaking the rules even after CZ went to jail for just that, allowing US citizens to access the platform. Even for the case of the US it was with VPN... Here it's much more egregious. Seems like they really are not afraid of EU's regulatory overreach especially with the fragmented by country market and lack of unified prosecution for individuals.

So they just seem to have gone rogue for the EU. Good for them I guess. Binance continued to have more volumes and cheaper fees than any MiCA verified exchange so ultimately it's good for competition that EU users still have access to a deep and trusted market to perform their trades and. No matter how "rogue" that is, I hope it lasts. Fuck the EU's consumer protection laws. In the end they narrowed the market and ultimately made it more expensive to do a simple trade.

Binance is literally enforcing KYC voluntarily now. They found a bank to deal with EUR even outside EU's reach. They could literally ditch all regulations and continue using the currency. The EU has that little control over their own banking. Yet binance shows they have the upper hand here becsuse they continue to enforce regulations that make sense completely voluntarily and in good faith.

[yhiaali3]

Doesn't this circumvention by Binance constitute a violation of the "Reverse Solicitation" rule, since, as far as I know, the MiCA law strictly prohibits unlicensed foreign platforms from actively targeting or attracting European customers?

Since providing Binance with alternative installation and update files (APK) and directing users to Georgian accounts constitutes "explicit active targeting" of European customers and not a spontaneous desire of the customer.

They can also put pressure on Georgia. Because Georgia has applied to join the Single European Payments System (SEPA), the EU has "strong leverage"; it can make Georgia's acceptance into the system conditional on its strict compliance with not facilitating circumvention by prohibited or unlicensed companies.

[alani123]

Doesn't this circumvention by Binance constitute a violation of the "Reverse Solicitation" rule, since, as far as I know, the MiCA law strictly prohibits unlicensed foreign platforms from actively targeting or attracting European customers?

Since providing Binance with alternative installation and update files (APK) and directing users to Georgian accounts constitutes "explicit active targeting" of European customers and not a spontaneous desire of the customer.

They can also put pressure on Georgia. Because Georgia has applied to join the Single European Payments System (SEPA), the EU has "strong leverage"; it can make Georgia's acceptance into the system conditional on its strict compliance with not facilitating circumvention by prohibited or unlicensed companies.

Well yeah these are my thoughts exactly. Georgia has been one of the countries in the caucuses trying to be buddy buddy with the EU because many people there feel wronged by Russia. But on the other hand many of their banks and a vast portion of the national wealth is still controlled by oligarchs who have a lot of interest to trade with both Russia and the EU. Surely one of the banks there at least would feel no problem doing something that the EU wouldn't like. Of course this could throw the country's EU accession down a bit, at least until the bank is strong armed to stop cooperating with binance. It's only a matter of time to see how fast EU acts.

[X-ray]

Doesn't this circumvention by Binance constitute a violation of the "Reverse Solicitation" rule, since, as far as I know, the MiCA law strictly prohibits unlicensed foreign platforms from actively targeting or attracting European customers?

Since providing Binance with alternative installation and update files (APK) and directing users to Georgian accounts constitutes "explicit active targeting" of European customers and not a spontaneous desire of the customer.

They can also put pressure on Georgia. Because Georgia has applied to join the Single European Payments System (SEPA), the EU has "strong leverage"; it can make Georgia's acceptance into the system conditional on its strict compliance with not facilitating circumvention by prohibited or unlicensed companies.

Well yeah these are my thoughts exactly. Georgia has been one of the countries in the caucuses trying to be buddy buddy with the EU because many people there feel wronged by Russia. But on the other hand many of their banks and a vast portion of the national wealth is still controlled by oligarchs who have a lot of interest to trade with both Russia and the EU. Surely one of the banks there at least would feel no problem doing something that the EU wouldn't like. Of course this could throw the country's EU accession down a bit, at least until the bank is strong armed to stop cooperating with binance. It's only a matter of time to see how fast EU acts.

It violates the narrow exemption for reverse solicitation rule and even ESMA has clarified this in this article.

It only ends there though, no meaningful enforcement against the certain 3rd country company that intentionally solicits clients in the Union so far.

Even the active onboarding they are doing is already violation of the reverse solicitation.

[alani123]

@X-ray

I'm speculating the EU will act sooner or later because this regulation was long coming and the regulatory bodies as well as EU authorities  and institutions will look very weak if nothing is done to challenge those breaking their rules and soliciting EU clients.

What's the point of regulation if there's no enforcement after all? The EU tried to play it as if they won't let crypto businesses operate on their own anymore, claiming it was like the wild west without them. It's still going to be a wild west even with bank transactions it seems, but will they let it be so blatant still?

[SamReomo]

I'm speculating the EU will act sooner or later because this regulation was long coming and the regulatory bodies as well as EU authorities  and institutions will look very weak if nothing is done to challenge those breaking their rules and soliciting EU clients.

I think your speculation is right at its place right now Binance is taking advantage of the loophole of the MiCA law but when EU authorities finds about that they'll most probably take action against it.

They might need to talk to Georgia government to show what's happening but I don't think they'll be able to take any action as of now and the users will keep using the exchange without issues. The EU authorities might improve the law to remove such loopholes but it's going to take time so as of now users from EU countries can enjoy Binance services.

[RGBTC]

Binance has ball knowledge haha, they always find a workaround. Like in the US case, they were restricted from providing their services when they were forced to leave the US, but they were routing US citizens via VPNs etc. to their global exchange, that was right under their nose and the loophole was there for regulation to see but they did not fail. The operation was probably not that big to be caught up by the regulation there, that's why they were able to work with this for a while, but eventually got caught.

Well, Binance is no longer a startup trying to scale up; Europe is practically their backyard, and they undoubtedly have legal experts who understand alternative approaches to sidestep regulatory violations. Binance won't cross the line until MiCA develops rules capable of cornering them.

They did the same in the 2017 China ban, they left China and moved to Japan, FSA warned Binance, so they shifted to Malta. Then Malta also raised concerns about the license, they said we did not have any headquarters here haha.

Remember back when Binance provided a backdoor to serve Chinese users on their platform?

[Lucius]

~snip~
Remember back when Binance provided a backdoor to serve Chinese users on their platform?

They always operate in a gray area, that's no longer in question - the only question is how long it will last. It is not as easy to buy political favor in the EU as it is in the US, and with the recent cooperation with Russia on revealing users to the authorities there, they have moved even further away from doing business legally in the EU.

As for Georgia, it all comes down to how important that country is to the EU, because if they have something they need, they will gladly turn their heads the other way on such matters.

[hd49728]

They did the same in the 2017 China ban, they left China and moved to Japan, FSA warned Binance, so they shifted to Malta. Then Malta also raised concerns about the license, they said we did not have any headquarters here haha.

Things in 2017 and 2026 are very different especially in legal and regulatory enforcement on Bitcoin and cryptocurrency industry. Remember that in the previous bear market, Changpeng Zao and Binance were sued by DOJ and they both had to pay expensive costs, while CZ individually had to spend months in jail.

It was less risky, more safer for Binance to operate in grey area in 2017 while in 2026 and coming years, they will have to obey to many existing and coming regulations. They can ignore governments in small nations but in the USA and a big region like Europe, they will not be able to do that without any legal cost.

They always operate in a gray area, that's no longer in question - the only question is how long it will last. It is not as easy to buy political favor in the EU as it is in the US, and with the recent cooperation with Russia on revealing users to the authorities there, they have moved even further away from doing business legally in the EU.

It's interesting to see how Binance cope with MiCA in the Europe but I believe there will be less safe places for Binance moving around, and eventually they will have to do necessary things for coping with MiCA.

As for Georgia, it all comes down to how important that country is to the EU, because if they have something they need, they will gladly turn their heads the other way on such matters.

Their national benefit will be most important for their countries and politicians will not mind to change many things quickly if they can do that according to national constitutional power.

[zasad@]

In the US, Coinbase has taken over a large portion of Binance's market share. Blackrock is behind Coinbase, and I'm not surprised. In Europe, other players in the market also don't want to allow Binance to operate legally because they understand they'll lose market share.
Binance will continue to fight for the European market, either legally or through loopholes in the MiCA legislation.

[yhiaali3]

@X-ray

I'm speculating the EU will act sooner or later because this regulation was long coming and the regulatory bodies as well as EU authorities  and institutions will look very weak if nothing is done to challenge those breaking their rules and soliciting EU clients.

I am also certain that the European Union will act sooner or later because they must have anticipated that some companies would try to circumvent the law. If they don't act immediately, the MiCA law will be weakened and will encourage others to circumvent it.

But what legal action could the European Union take against Binance that would be effective enough? The only thing I would expect is for Binance to be prevented from accessing European banks or for its accounts to be blocked if it has bank accounts in the European Union.

[alani123]

@X-ray

I'm speculating the EU will act sooner or later because this regulation was long coming and the regulatory bodies as well as EU authorities  and institutions will look very weak if nothing is done to challenge those breaking their rules and soliciting EU clients.

I am also certain that the European Union will act sooner or later because they must have anticipated that some companies would try to circumvent the law. If they don't act immediately, the MiCA law will be weakened and will encourage others to circumvent it.

But what legal action could the European Union take against Binance that would be effective enough? The only thing I would expect is for Binance to be prevented from accessing European banks or for its accounts to be blocked if it has bank accounts in the European Union.

The EU is still a strong negotiating bloc.

Especially now with Google requiring authorship for apps on android phones, they could strongarm Google to block binance from non-rooted phones. Somehow big corporations that have so much control just are so ready to do the bidding of governments.

It's just interesting that binance fights back now. I'm surprised it hadn't been done by any other big exchange before actually.

[X-ray]

@X-ray

I'm speculating the EU will act sooner or later because this regulation was long coming and the regulatory bodies as well as EU authorities  and institutions will look very weak if nothing is done to challenge those breaking their rules and soliciting EU clients.

What's the point of regulation if there's no enforcement after all? The EU tried to play it as if they won't let crypto businesses operate on their own anymore, claiming it was like the wild west without them. It's still going to be a wild west even with bank transactions it seems, but will they let it be so blatant still?

They will act sooner or later as you said.

This is just another case of enforcement being too slow to punish the violators especially a corporation that have billions and willing to spend hundreds of millions to hire best lawyer to circumvent the regulation.

Even though I believe, with bloc-wide punishment, Binance wouldn't necessarily be out of business in EU, they recently hired two senior compliance executives and it's not for nothing.

[zasad@]

I am also certain that the European Union will act sooner or later because they must have anticipated that some companies would try to circumvent the law. If they don't act immediately, the MiCA law will be weakened and will encourage others to circumvent it.

But what legal action could the European Union take against Binance that would be effective enough? The only thing I would expect is for Binance to be prevented from accessing European banks or for its accounts to be blocked if it has bank accounts in the European Union.

What does Binance have to do with this if they're not violating MiCA laws?
Binance has legally blocked new user registrations from Europe since July 1, 2026, and the company doesn't advertise in Europe and doesn't violate European laws.
What measures can be taken if the company is not violating anything?