Binance, the world’s largest digital asset exchange, is facing a major problem in Europe. The company failed to get approval under the European Union’s new digital asset rules before its rapidly approaching and important deadline.

Because of this, Binance told users in several EU countries that some services will be limited or stopped starting July 1. This happened after Binance withdrew its license application in Greece under the EU’s new digital asset law called MiCA.

MiCA stands for Markets in Crypto-Assets. It creates one set of rules for digital asset companies across the European Union. Under these rules, a company only needs approval from one EU country to legally operate across all 27 member states.

Binance tried to get this approval through Greece’s financial regulator but announced on June 24 that it was pulling its application.

The company tried to calm users and said their money was not in danger.

“Your assets remain safe and secure, and will remain accessible at all times,” Binance said.
The exchange explained that it withdrew the application after reviewing how long the approval process in Greece was taking.

“Over many months, Binance worked constructively and in good faith,” the company said in its communication to users. But with no formal decision expected before the end of the transition period, Binance said it chose “to move forward in a way that gives users more clarity.”

Binance has not officially explained why the application did not succeed. However, several reports said regulators looked closely at Binance’s anti-money laundering controls and whether the company met MiCA’s “fit and proper” requirements.

These rules are designed to check whether company owners and leaders are suitable to run a regulated financial business.

One person receiving attention is Binance founder Changpeng Zhao, who still owns a large part of the company. In 2023, Binance reached a settlement with US authorities over anti-money laundering and sanctions violations and agreed to pay more than $4.3 billion.

Zhao also stepped down as CEO and pleaded guilty to a separate criminal charge.
Binance says it has improved its compliance systems and worked hard to meet regulatory expectations.

Even after this setback, Binance says it still wants to stay in Europe. “Our ambitions in Europe remain the same, and we are confident we will secure a MiCA licence in the coming months,” the company said.

Financial Times reports that Binance now plans to apply for approval in France. If successful, the company could later use that license to operate across the EU again.

For users, the effects depend on where they live and what type of account they have.

Binance contacted users in countries including France, Italy, Poland, and Spain to explain what happens next. The exchange said it will stop accepting some new registrations and will limit certain services while continuing to send updates to affected users.

The company also said users do not need to move their money immediately. “We are not telling users to withdraw their funds by July 1. User assets remain safe and secure,” Binance said.

The MiCA transition period ends on June 30. Companies without approval are expected to reduce services and move toward closing regulated activities instead of continuing business as usual.

At the same time, Binance’s competitors are trying to attract its customers.

Coinbase launched special offers in several European countries and highlighted that it already has MiCA approval.

OKX also introduced promotions for users moving funds from other exchanges.

BitPanda has also adopted a similar strategy. In its marketing push, the company described its services as “Regulated. Trusted. European.”

Coinbase said it offers “unified global liquidity,” while OKX called MiCA “the start of a new era for crypto in the region.”

Danny Sanders, COO of Trezor, argues that Binance's situation reflects a much broader shift in the European digital asset market rather than an isolated case.

In an email to Bitcoin News, he noted, "only around 200 firms got a MiCA licence out of more than 3,000 that were operating in Europe," meaning users of multiple exchanges, not just Binance, but also platforms such as Bitget and KuCoin, could face disruptions as regulators enforce the new rules.

Sanders believes the trend will ultimately push more users toward self-custody. "An account on an exchange was never the same as holding the coins," he said. "Self-custody is the only version of this that was ever actually yours."