Why EU regulators balk at approving Binance under MiCA

Binance withdrew its application for a Markets in Crypto‑Assets (MiCA) license in Greece and told users it will pursue authorization in another EU member state after regulators raised concerns. The European Securities and Markets Authority has instructed unauthorized crypto‑asset firms to stop onboarding new EU clients and to limit services for existing users to exits and withdrawals while licensing decisions proceed.

Greek authorities flagged issues with Binance’s governance, ownership structure and anti‑money‑laundering controls. Officials in Ireland and Latvia also reported friction during discussions about the company’s application. Under MiCA, a national regulator must complete a fitness assessment before issuing a crypto‑asset service provider license; that national approval is then passported across all 27 EU member states.

MiCA requires documentation and evidence on management fitness, qualifying shareholders, AML/CFT controls, custody arrangements, client‑asset segregation, internal governance and group structure. Article 63 allows national authorities to refuse authorization if the management body or shareholders pose risks to sound and prudent management, client interests or market integrity, or if there is a serious risk of money laundering or terrorist financing. Regulators may consult anti‑money‑laundering authorities and financial intelligence units during the review.

European supervisors are treating Binance’s US legal record as material to those assessments. In late 2023 the US Department of Justice reached a resolution in which Binance pleaded guilty and agreed to pay more than $4 billion to resolve violations of the Bank Secrecy Act, money transmission and sanctions rules. Binance’s founder pleaded guilty to failing to maintain an effective AML program. The Treasury’s Financial Crimes Enforcement Network reached a $3.4 billion settlement and the Office of Foreign Assets Control recorded $968 million in penalties; both settlements included monitorship and compliance undertakings.

Binance has said it rebuilt its compliance systems and now employs about 1,500 compliance staff. The firm’s EU regional head has stated that the founder no longer manages the company. Regulators will assess not only formal titles, but also evidence that management and qualifying shareholders do not exercise informal control that could undermine governance or client protection.

European supervisors can consult the company’s regulatory history. Binance exited the Netherlands in 2023 after failing to register and was fined for operating without authorization. The firm withdrew a custody‑license application in Germany after local supervisors indicated approval was unlikely. Belgium’s financial regulator ordered Binance to stop providing services from outside the European Economic Area, citing uncertainty about which legal entities were offering services and whether they were authorized. French prosecutors opened an investigation in 2025 into alleged money laundering and tax fraud; Binance has denied wrongdoing.

If a national regulator concludes that Binance’s governance and compliance reforms are verifiable, MiCA provides a route for the company to regain EU access with a documented supervisory framework. If regulators determine that past AML, governance and group‑structure issues remain unresolved, Binance would face restricted activity in the EU, and users would be directed to withdraw or sell while licensed competitors may absorb market share.

The decision rests on whether documentary evidence and ongoing supervisory work meet MiCA’s standards and whether a national authority is prepared to extend a passported license that applies across the bloc.