Binance is facing a major regulatory hurdle in Europe after Greece's financial regulator reportedly moved toward rejecting the cryptocurrency exchange's application for a license under the European Union's Markets in Crypto-Assets (MiCA) framework.
The reported decision places the world's largest cryptocurrency exchange at risk of losing authorization to offer services to customers across the European Union when the bloc's transition period for MiCA compliance expires at the end of June.
Two people familiar with the matter told Reuters that Binance's application to Greece's Hellenic Capital Market Commission is expected to be denied, a development that would prevent the company from obtaining the regulatory approval required to continue operating throughout the EU under the new regime.
Under MiCA rules, crypto firms must secure authorization from a national regulator in one EU member state, allowing them to "passport" their services across all 27 countries in the bloc. The framework was introduced as part of the European Union's effort to create a unified rulebook for the digital asset industry and strengthen investor protections.
A representative for the Hellenic Capital Market Commission declined to comment on Binance's application because of confidentiality rules. Binance said it had not received a formal rejection and remained engaged with regulators during the licensing process, the report said.
Binance selected Greece as its European regulatory base earlier this year after establishing a local entity known as Binary Greece. The exchange said it chose the country because of factors including workforce availability and security considerations, while seeking a license that would permit operations across the European Union, Reuters reported in February.
The licensing process has drawn attention because Greece had not issued any MiCA licenses to crypto-asset service providers when Binance submitted its application. Public data cited by CoinMarketCap showed that Germany and the Netherlands had issued significantly more authorizations under the framework, while Greece had yet to approve any firms.
MiCA was developed following years of regulatory debate over cryptocurrency oversight in Europe. The rules gained additional urgency after a series of market disruptions, including the collapse of major crypto businesses and growing concerns among policymakers about consumer protection, financial crime risks and the use of digital assets in sanctions evasion.
European authorities have also increased scrutiny of financial transactions linked to geopolitical conflicts, including Russia's war in Ukraine and efforts to enforce sanctions against individuals and entities targeted by Western governments. Regulators across Europe and the United States have repeatedly highlighted the importance of monitoring digital asset transactions as part of broader anti-money laundering and sanctions compliance efforts.
Binance has spent the past several years attempting to strengthen its regulatory standing in major markets following heightened scrutiny from authorities worldwide. The exchange has sought licenses in multiple jurisdictions and has repeatedly stated that compliance remains a central part of its strategy.
The company now faces a critical regulatory challenge in Europe as the MiCA deadline approaches. While Greece's regulator has not publicly announced a final decision, sources cited by Reuters said Binance's application is expected to be rejected, leaving uncertainty around the exchange's ability to continue offering services throughout the European Union after the new rules take full effect.
