Lawyers and industry executives expect EU regulators to enforce MiCA differently as unauthorized crypto companies are required to wind down operations.
The European Union’s cryptocurrency industry has entered a new enforcement phase as the transition period under the Markets in Crypto-Assets (MiCA) regulation came to an end.
The end of the transition means crypto companies without MiCA authorization can no longer legally serve EU clients and are expected to wind down operations or face multimillion-euro fines and other enforcement action.
Industry executives and lawyers told Cointelegraph the next challenge is ensuring national regulators apply the bloc’s single rulebook consistently, even as supervisory approaches are expected to vary across member states.
The transition marks MiCA’s first major enforcement test as regulators begin applying the EU's crypto rulebook.
Although complying with MiCA can cost hundreds of thousands or, in some cases, millions of euros, experts say operating without authorization carries far greater financial and regulatory risks.
Nicola Massella, partner at Storm Partners, estimated MiCA implementation costs for many cryptocurrency companies at 350,000 euros ($400,000) to 600,000 euros ($690,000), while Brickken CEO Edwin Mata said costs can reach 2 million euros ($2.3 million) depending on a company’s size, services and compliance readiness.
On penalties, Eckehard Stolz, managing director of Amina EU, said MiCA penalties start at 5 million euros or 5% of annual turnover for some violations.
Massella added that the European Banking Authority (EBA) proposed on June 26 increasing penalties under certain regulatory regimes, including as much as 12.5% of annual turnover for some stablecoin-related breaches.
While MiCA creates a single EU rulebook, day-to-day supervision is handled by national competent authorities (NCAs), which authorize, supervise and enforce the rules for crypto companies.
The European Securities and Markets Authority (ESMA) coordinates supervision across member states and maintains the public register of authorized crypto-asset service providers, and the EBA directly oversees significant stablecoin issuers.
“At the EU level, ESMA plays an important coordination and supervisory-convergence role, especially to avoid regulatory arbitrage between member states,” Ivo Grlica, founder of GrlicaLaw and G Lab Advisors, told Cointelegraph.
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