Europe's MiCA rollout sparks debate over who wins under new crypto rules

Policy Europe's MiCA rollout sparks debate over who wins under new crypto rules As Europe's crypto rulebook takes full effect, industry leaders agree regulation is here to stay, but disagree over whether it protects consumers or favors the biggest firms. By Olivier Acuna | Edited by Cheyenne Ligon Jul 1, 2026, 2:00 p.m. 3 min read Make preferred on Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Make preferred on (ESMA/Media) Summary Show The European Union’s Markets in Crypto-Assets regulation is now fully in force, requiring any crypto firm serving customers in the 27-nation bloc to hold a MiCA license or cease operations. Lawyers and executives say MiCA brings welcome regulatory clarity but warn that high compliance costs could shrink the number of licensed providers and disadvantage startups while favoring larger, better-resourced firms. Industry leaders support the goal of transparency and consumer protection but question whether EU regulators can effectively police unlicensed offshore platforms and ensure a level playing field for compliant exchanges. The European Union's crypto market entered a new era on Wednesday as its Markets in Crypto-Assets (MiCA) regulation came into full effect, meaning crypto firms serving customers across the 27-nation bloc are required to hold a license or stop operating. Thousands of cryptocurrency service providers face suspension and were legally obligated to stop servicing customers in the EU as of midnight, June 30, leaving millions of European users hunting for a MiCA-approved platform. Executives and lawyers welcomed the single regulatory framework across the EU, but disagreed over whether MiCA creates a fair market. Some said the cost of compliance has made it impossible for smaller firms to operate in the country, forcing them to look elsewhere, including Dubai. Others believe the rules rightfully benefit those crypto firms that invested in transparency. Another concern is whether regulators can prevent offshore firms from continuing to serve European customers without a license. "I believe that regulating crypto on a European level is a very positive thing," said Dr. Joseph Borg, a Maltese lawyer and partner at WH Partners who has advised crypto firms since 2016. "Regulation is necessary." Borg, however, said the biggest challenge is no longer the law itself but how regulators are applying it. He estimates Europe could go from roughly 3,000 registered crypto asset service providers to only 300 or 400 licensed firms under MiCA — which he indicated would suit the regulators just fine "I'm noticing that regulators are becoming more and more lazy," Borg said. "They prefer having 20 operators to regulate rather than invest in more technology and more human resources to supervise more operators." Who can afford transparency? Borg believes the growing cost of compliance is biased toward companies that can afford bigger legal and compliance teams. While MiCA itself does not intentionally favor large firms over smaller ones, he said the technical standards and supervisory expectations introduced alongside the regulation have made it harder for startups to compete. Not everyone agrees. Alex Fazel, chief partnership officer at SwissBorg, said obtaining a MiCA license is less about company size than proving how a business operates. "Transparency is key," Fazel said. "You cannot build trust without transparency." SwissBorg received its MiCA license through France's financial markets regulator this year. Fazel said the licensing process required the company to document its governance, compliance procedures and operations in detail. "A MiCA license is not something you can buy because you have money and power," he said. "It is making sure every process is fully transparent." Still, Fazel acknowledged the new rules will be hardest on startups because obtaining and maintaining a license requires significant capital. "If there's one segment I feel bad for, it's startups," he said. "Innovation may suffer for companies that don't have enough capital." A level playing field For licensed exchanges, another question remains: whether regulators can enforce the new rules against firms operating outside the European Union. Dr. Lin Han, founder and CEO of Gate Group, said licensed exchanges have spent years preparing for MiCA, but the framework only works if everyone follows it. "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 said firms serving EU clients without MiCA authorization are breaching EU law and should stop offering those services. It has also warned firms not to rely on "reverse solicitation" to continue serving European customers and has encouraged measures such as geo-blocking to prevent access. Han questioned whether regulators have the resources to prevent unlicensed platforms from continuing to operate from overseas. "If unregulated or unregistered platforms can still provide services, then it's not a level playing field," he said. Despite their disagreements, all three agreed on one point: crypto regulation in Europe is here to stay. Borg said MiCA has helped banks become more willing to work with crypto companies. Han said Europe remains too important a market for global exchanges to ignore despite the higher compliance costs. Fazel said stronger oversight should improve consumer protections by giving customers greater legal recourse if a licensed firm fails. He also said it brings market stability. "I really see regulators as a net positive for the industry," Fazel said. "They're here to verify." 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