The European Union's Markets in Crypto-Assets (MiCA) regulation has come into effect, and it appears that many crypto exchanges and wallet providers are not ready. As of July 1st, only about 17% of over 1,200 firms have converted to full crypto-asset service provider authorization under the new framework.
According to ESMA, unlicensed platforms must stop processing new transactions immediately after July 1st and communicate their departure timelines to users. The regulator has confirmed that any entity providing crypto-asset services to EU clients without a MiCA license is in breach of EU law.
The administrative penalties for continued unlicensed operation run to €15 million or 12.5% of annual turnover, whichever is greater. Germany leads the list of countries with issued licenses, followed by the Netherlands and France. However, some countries like Poland have yet to issue any licenses, leaving a substantial operator base without a regulatory home.
The firms that did make the deadline are mostly well-capitalized institutions such as Kraken, Coinbase, Bitstamp, OKX, Binance, Bitpanda, Crypto.com, and Revolut. These companies dominate EU crypto trading volumes today, while smaller competitors struggle to comply with MiCA's requirements.