Regulators in Europe are questioning cryptocurrency exchange Binance over its ongoing operations on the continent without the appropriate license.
Officials in the European Union (EU) are accusing Binance of using a legal exemption to continue serving ​customers in the region despite an order to wind ‌down its operations.
Privately held Binance is the world's largest crypto exchange.
The company lost permission to offer ​its trading services to European clients after its application under a ​new licensing regime was rejected earlier this year.
Binance has said its failure to secure the needed operating license in Europe threatens the accounts of millions of users.
The European Union requires that exchanges such as Binance secure an operating license under the "Markets in ​Crypto-Assets" framework.
Crypto firms were to obtain a license by the ​end of June in order to continue operating within Europe. Without the needed license, Binance cannot continue operating in the European Union.
The European Securities and ​Markets Authority is looking into Binance's use ​of "reverse solicitation," a legal exemption that allows companies based outside of Europe to provide financial ‌services ⁠to customers on the continent.
Reverse solicitation requires that users of Binance's exchange seek the relationship entirely on their own initiative without any coercion from the company.
Regulators in individual European nations have also reportedly requested information from Binance and ​could take enforcement actions against the company on their own
Those actions could included imposing fines on Binance. The company has said that it plans to reapply for the needed European operating license.
This is the latest regulatory scrutiny of Binance. In the U.S., the exchange has been accused of helping countries such as Iran evade economic sanctions, which Binance vehemently denies.
As a private company, Binance's stock does not trade on a public exchange.