Binance MiCA bid faces new scrutiny after Lagarde report

Binance’s failed Greek MiCA bid has returned to scrutiny after The Wall Street Journal reported Sept. 18 that European Central Bank President Christine Lagarde personally pressed Greek Prime Minister Kyriakos Mitsotakis against approving the exchange’s application.

The Wall Street Journal reported that Binance had been preparing in late May to announce an EU-wide regulatory approval through Greece after Greek officials told the company its application was complete. The newspaper said Binance had drafted a release describing the expected authorization as a “Major Milestone,” while co-CEO Richard Teng planned to travel to Athens for a meeting and photograph with Mitsotakis.

The reported intervention has not been confirmed in a public statement from Lagarde, the ECB or Greece’s Hellenic Capital Market Commission. Under current MiCA law, the ECB does not grant crypto-asset service provider licenses. The application rested with the HCMC, while ESMA had a coordination and supervisory-convergence role.

WSJ says Lagarde raised compliance and stablecoin concerns

According to the WSJ report, Lagarde opposed Binance receiving the Greek authorization after the process had moved close to approval. The newspaper attributed the account to people familiar with discussions surrounding the application.

The reported concerns included Binance’s previous U.S. criminal case. In 2023, Binance pleaded guilty to violations involving the Bank Secrecy Act, failure to register as a money transmitting business and sanctions laws, agreeing to a settlement exceeding $4 billion. Reuters later reported that Binance’s legal history and corporate structure were among the issues European regulators examined during the Greek licensing process.

WSJ further reported that Lagarde was concerned that allowing the world’s largest crypto exchange to gain a MiCA passport could increase the use of U.S. dollar stablecoins inside Europe. The newspaper linked that concern to the ECB’s work on European monetary sovereignty and the planned digital euro.

Lagarde has publicly raised similar policy concerns without referring specifically to Binance. In a May 8 speech, she said stablecoin supply had grown above $300 billion and remained overwhelmingly dollar-denominated, with Tether and Circle controlling nearly 90% of the market. She said Europe faces a risk of “digital dollarisation and a loss of monetary sovereignty” if foreign-currency stablecoins become deeply embedded in its financial system.

Her speech did not argue for banning stablecoins. Lagarde instead said Europe should build public settlement infrastructure anchored in central bank money while allowing regulated private forms of <a href="https://xpertsstudio.com/sec-clears-tokenized-stocks-to-trade-onchain-as-cftc-widens-software-relief/” title=”SEC Clears Tokenized Stocks To Trade Onchain As CFTC Widens Software Relief”>tokenized money to operate within that system.

The ECB currently expects to be technically ready for a possible first digital euro issuance during 2029, assuming EU lawmakers adopt the required legislation. A pilot is planned for 2027 under the present timetable.

Binance says its Greek application had met MiCA requirements

Before withdrawing its application, Binance publicly disputed suggestions that its submission itself had failed Greece’s regulatory review.

In a June 16 update, Binance said its “understanding” was that the HCMC had completed its review and considered the application compliant with MiCA requirements. The exchange further said it understood that the file had been reviewed at ESMA level. Those statements represented Binance’s account of the process and were not accompanied by a public HCMC approval decision.

Reuters reported on June 16 that the Greek regulator was preparing to reject the application, citing two people familiar with the process. HCMC declined to discuss Binance’s case at the time, citing confidentiality rules. Binance responded that the regulator had provided “no formal indication” contradicting its belief that the application met the requirements.

Under MiCA, an applicant submits its authorization request to the competent regulator in its home member state. Once licensed, the crypto-asset service provider can use that authorization to offer covered services across the EU without obtaining a separate license in every country.

MiCA requires regulators to examine governance, internal controls, anti-money-laundering procedures and the reputation of management and shareholders with qualifying holdings. Applicants must provide information on criminal convictions and penalties involving financial services, AML rules, fraud and related areas.

As earlier crypto.news coverage reported in June, Binance said at the time that it had received no formal notice that the Greek application would be denied even as reports indicated rejection was approaching.

Binance withdrew before Greece issued a final decision

On June 24, Binance pulled its Greek MiCA application before the HCMC published a final approval or rejection. The company said in its official notice that it would seek authorization through another EU member state.

Binance said it made the decision after assessing “the status and the timeline” of the Greek process as the EU transition deadline approached. It did not cite Lagarde or the ECB when announcing the withdrawal.

The deadline had direct operational consequences. Article 143 of MiCA allowed eligible firms operating under earlier national rules to continue only until July 1, 2026, or until regulators granted or refused a MiCA authorization, whichever came first.

Without a MiCA authorization, a provider cannot generally continue offering regulated crypto services throughout the bloc. ESMA states that firms reaching the end of their permitted transition period without approval must stop providing those services until authorization is granted.

As crypto.news reported after the withdrawal, Binance informed affected European users that services would be restricted after the July deadline while withdrawals remained available.

The company has continued pursuing a route back into the regulated EU market. Reuters reported in July that Teng said regulators in other jurisdictions had shown interest in Binance applying for licenses after the Greek process ended. He did not publicly identify a completed replacement authorization.

More recently, crypto.news reported on remaining EU access that some customers continued using Binance after July through reverse solicitation and offshore arrangements, including an Abu Dhabi entity. The report said ESMA had sought information about whether Binance was properly winding down its unlicensed EU activities. Those arrangements do not amount to a MiCA passport.

ESMA licensing reform is still being negotiated

One element of the WSJ account concerns a separate debate over who should supervise Europe’s largest crypto businesses.

Current MiCA rules leave CASP authorization with national competent authorities. ESMA coordinates standards and receives information concerning large providers, but Article 85 does not currently make ESMA the licensing authority for major crypto exchanges.

The European Commission proposed changing that arrangement as part of its market-integration agenda. The original plan would give ESMA direct supervisory responsibility for crypto-asset service providers, reducing reliance on 27 separate national supervisory structures.

The proposal has not become law. A June Council document showed that a broad majority of EU member states preferred transferring only significant crypto-asset service providers to direct ESMA supervision, instead of all CASPs as the Commission originally proposed. Ministers were still debating the definition of significance and the role national regulators would retain.

Separately, the Commission opened a review of MiCA in May. Its targeted consultation remains open through Sept. 30, with potential legislative amendments to follow depending on the review’s findings.

The WSJ reported that the possible move toward centralized ESMA oversight was one consideration behind Lagarde’s reported intervention. No public ECB document reviewed for this report confirms that Lagarde formally requested Greece delay Binance’s application pending those reforms.

Binance has not publicly announced a new MiCA authorization since withdrawing from Greece. Its latest official European licensing posts continue to state that it plans to seek authorization in another member state, while ESMA’s existing legal framework still leaves licensing decisions with national competent authorities until any supervisory reform is adopted.

Source: cryptonews.net