A feasible regulation is one of the quintessential elements that allows an industry to grow peacefully without legal grey zones. In crypto, regulations play a vital part. Markets in Crypto Assets (MiCA), a comprehensive crypto regulatory framework, has been in the industry, guiding the European Union’s (EU) Crypto Asset Service Providers (CASPs), investors, and consumers.
However, as time moves on, several crypto firms haven’t yet sought registration under MiCA before the deadline ends in July 2026. Paris, Stéphane Pontoizeau, Executive Director of the Market Intermediaries and Market Infrastructures Supervision Directorate at the AMF, stressed this important point: Last year, regulators had already reminded firms about the deadline.
Crypto firms without MiCA licenses must wind down
The EU’s financial regulators have given a different transition period for firms in different countries to shift to a complete MiCA-regulated environment. Among the EU countries, France has eagerly jumped into regulatory innovation when compared to other countries.
As reported by Reuters, the French regulator, Paris, Stéphane Pontoizeau, underscored that 30% of crypto firms in the country have applied for the MiCA license, while 40% said they are still not seeking the license.
A crucial detail here is that, according to the European Securities and Markets Authority (ESMA), companies that haven’t secured a MiCA license must shut down their operations, or in other words, have an “orderly wind-down plan,” before the deadline.
The orderly wind-down plan will allow firms to professionally shut down their operations without affecting user funds.
MiCA licensing period ends soon, but crypto firms still await
As the EU license deadline approaches, several crypto firms could read their fate. Nevertheless, several firms are hesitant to apply for a license, and the answer can be attributed to the following reasons.
Complexities in licensing procedures
Licensing is not just a paperwork process. That’s quite clear. To get a MiCA license, firms have to meet regulators and go through substantive internal frameworks like submitting capital thresholds, governance, and reporting to regulators. There could be several crypto startup companies that lack enough resources, including staffs to go for the license.
Plans to go behind opportunities
Another reason why firms have not yet dived into the licensing process could be due to their plans to leave the European Union and establish themselves in other regions, where comprehensive crypto regulations do not exist.
Regulatory Friction across EU countries
As mentioned earlier, different countries have different transition or implementation periods, meaning deadlines for securing the approval vary.
Also, some crypto platforms in France might worry that obtaining the MiCA license from France would not fit when it starts its operations in different countries. This concern stems from the fact that France has earlier signaled that it could restrict MiCA-regulated firms in other countries. French regulators are concerned about the oversight in other countries that could pose risks to their consumers.
Big players might be restless under MiCA
This is a key integral reason why MiCA is very comprehensive in nature. Big players may not approach for the license, as the regulatory framework requires clear corporate structures, strong governance, and audited reserves.
Haste makes waste
PI MAN, a blockchain validator and crypto enthusiast, pinpointed an important reason why some crypto platforms like Pi Network take time to approach regulators for a license.
He pulls out the facts that Pi Network was never designed as a speculative token, and it focuses on real use cases, consumer protections, and sustainability. As MiCA requires crypto projects to follow proper rules that combine consumer protections, real utilities, governance, and transparency, Pi Network is working on aligning its architecture with the framework.
MiCA aims for ‘say no to speculations’ and more
MiCA was adopted in 2023. Two years later, nearly 53 crypto firms, including CASPs and stablecoin issuers, have been registered under MiCA. Firms like Coinbase, OKX, Crypto.com, Kraken, Bitstamp, Bybit, Circle, Societe Generale-Forge, and more.
The goal of MiCA is not to crack down on crypto trading or crypto services, but protect investors, users, and economies and enhance financial stability, as the regulators claim. The framework also aims to eliminate crypto assets that engage in price manipulation, lack real utility, pose high risks, and more.
