As Europe’s crypto regulatory framework fully takes effect, industry leaders broadly agree that regulation is now a permanent feature of the market, but remain split on whether it strengthens consumer protection or gives an edge to larger firms.
The European Union’s crypto sector entered a new regulatory phase on Wednesday as the Markets in Crypto-Assets (MiCA) framework came into force. Under the new rules, all crypto firms operating across the 27-member bloc must obtain authorization or shut down.
Thousands of crypto service providers faced suspension after being required to cease EU operations by midnight on June 30, pushing millions of users to look for MiCA-licensed platforms.
Executives and legal experts largely support the introduction of a unified EU regulatory regime, but disagree on its market impact. Some argue that high compliance costs are pricing out smaller companies and driving them to relocate to jurisdictions like Dubai. Others say the rules fairly reward firms that have prioritized transparency and compliance. A key concern is whether regulators can effectively block offshore platforms from continuing to serve EU customers without authorization.
Joseph Borg, a Maltese lawyer and partner at WH Partners, said European-level regulation is a positive step. “Regulation is necessary,” he noted.
However, Borg argued that the bigger issue is now enforcement rather than the law itself, suggesting regulators may struggle to oversee the market effectively. He estimated that MiCA could reduce the number of crypto asset service providers in Europe from around 3,000 to just 300–400 licensed firms.
He also said regulators appear to prefer supervising fewer entities rather than investing in the tools and staff needed to manage a larger ecosystem.
On competitiveness, Borg said rising compliance obligations tend to favor firms with stronger legal and operational resources. While MiCA is not intentionally biased toward large players, he argued that associated requirements make it harder for startups to compete.
Others disagree with that view. Alex Fazel, chief partnership officer at SwissBorg, said MiCA licensing is fundamentally about transparency rather than scale.
“Transparency is key,” Fazel said. “Trust cannot exist without transparency.”
SwissBorg secured its MiCA license through France’s financial regulator this year. Fazel said the process required extensive disclosure of governance, compliance, and operational structures.
He emphasized that licensing cannot simply be purchased. “A MiCA license is not something you can buy because you have money and power,” he said.
Still, Fazel acknowledged that startups face the greatest pressure, as the cost of securing and maintaining compliance is substantial and may limit innovation among smaller players.
For regulated exchanges, a major question remains enforcement against offshore operators. Lin Han, CEO and founder of Gate Group, said compliant firms have prepared for MiCA for years, but the framework only works if all participants follow the same rules.
“Everybody needs to follow the rule,” Han said. “Then we can compete on better service for users.”
The European Securities and Markets Authority (ESMA) has warned that unlicensed firms serving EU clients are in breach of EU law and should stop operations. It has also discouraged “reverse solicitation” tactics and encouraged tools like geo-blocking to restrict access.
Han, however, questioned whether regulators have the capacity to stop offshore platforms from continuing to operate.
“If unregulated or unregistered platforms can still provide services, then it’s not a level playing field,” he said.
Despite differing perspectives, all three agreed that crypto regulation in Europe is here to stay. Borg said MiCA has made traditional banks more open to working with crypto firms, while Han noted that Europe remains too important a market for global exchanges to ignore despite higher compliance costs. Fazel added that stronger oversight improves consumer protection by increasing accountability and legal recourse.
“I really see regulators as a net positive for the industry,” Fazel said. “They’re here to verify.” Borg added that MiCA’s rollout reflects the maturity of crypto, noting that the sector has become too large to easily suppress or ban.
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