Key Takeaways
- According to Bloomberg, France’s crypto regulator identified compliance concerns during an inspection last year.
- Compliance shortcomings could hurt Binance’s bid to acquire an EU-wide license.
- The exchange is running out of time to secure registration under the EU’s Markets in Crypto Assets regulation.
Binance’s ability to conduct business in the EU hinges on its registration under the Markets in Crypto Assets (MiCA) regulation.
Several rivals have already secured the coveted registration, without which the world’s most popular crypto exchange risks falling behind.
To make matters worse, Binance’s risk controls have reportedly come under scrutiny from France’s ACPR, one of the most hawkish among the EU’s designated MiCA regulators.
ACPR Inspection Flags Binance Compliance Concerns
At present, Binance operates in France under the country’s pre-MiCA crypto framework, which sets out anti-money laundering (AML) requirements.
Registered crypto asset service providers are subject to ACPR inspections.
And during one such inspection last year, the regulator found shortcomings in Binance’s AML controls and was asked to strengthen its compliance, sources cited by Bloomberg said.
While it isn’t clear what the exact issues identified were, the ACPR is known to enforce specific technology standards and minimum staffing requirements.
Failure to rectify compliance failures may lead to sanctions and could damage Binance’s chances of MiCA approval.
Clock Ticking for Binance MiCA Compliance
When MiCA went into effect in December 2024, the ACPR gave firms registered under the old regime 18 months to comply—the maximum transition period allowed under the regulation. While Binance has stated its intention to apply for a MiCA license, as that deadline looms, it still hasn’t revealed which country it hopes to register in.
Potential candidates include Latvia and Malta, which serve as operational hubs for the crypto exchange. However, internal tension between EU regulators may complicate the choice.
Standards Diverge Across the EU
France’s ACPR is among those that have called for MiCA oversight to be centralized with the European Securities and Markets Authority (ESMA). This reflects ongoing concerns about regulatory arbitrage, with some national authorities viewed as more lenient toward crypto exchanges.
For example, earlier this year, the ESMA found flaws in the MiCA approval process of Malta’s Financial Services Authority (MFSA).
The island has emerged as a prominent crypto hub in recent years, and it functions as the EU license base for exchanges, including OKX.
Against this backdrop, MiCA passporting may be under threat.
France’s Financial Markets Authority has warned that unless enforcement is standardized across the EU, it may be forced to cease recognizing licenses issued elsewhere.
Ultimately, sidestepping the high bar for compliance set by the ACPR may prove impossible. That means Binance must step up to the plate, or risk losing access to the EU market.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
