tl;dr
Crypto exchanges Gemini and Coinbase are nearing EU regulatory approvals to operate across the bloc under the EU's Markets in Crypto-Assets (MiCA) framework. Gemini is close to approval from Malta, known for its fast licensing due to extensive crypto supervision experience, while Coinbase is expecte...
Crypto exchanges Gemini and Coinbase are on the verge of obtaining regulatory licenses that would allow them to operate EU-wide under the Markets in Crypto-Assets (MiCA) framework. Gemini is nearing approval from Malta, a country known for its swift crypto licensing due to extensive supervisory experience, while Coinbase is expected to be granted a license by Luxembourg, marking the first US-listed crypto firm to receive such approval in the EU.
The rapid pace of these approvals has stirred tension among EU regulators. Some express concern over inconsistent enforcement among member states, warning that this could lead to regulatory gaps in a crypto market valued at approximately $3.3 trillion. Malta’s efficiency in processing licenses owes to its long-standing expertise in crypto supervision, having previously approved firms such as OKX and Crypto.com shortly after MiCA’s implementation.
Meanwhile, the European Securities and Markets Authority (ESMA) has reviewed Malta’s licensing procedures and is preparing a report amid fears that the current decentralized licensing system may foster a “race to the bottom.” France’s financial regulator has openly voiced worries about the lack of ESMA’s direct licensing authority, highlighting risks of uneven regulatory standards.
Luxembourg’s anticipated licensing of Coinbase underscores ongoing debates about regulatory rigor and competition among member states. Despite critiques suggesting Luxembourg’s standards might be lenient, officials reject these claims, arguing competition is a key factor in these discussions. Coinbase’s growing European presence, including plans to expand its Luxembourg office, reflects its commitment to engaging deeply with the EU market.
The EU faces internal divisions on how best to enforce MiCA regulations, balancing the need to protect investors while fostering innovation that could establish Europe as a leading global crypto hub. This dilemma is heightened by the backdrop of recent industry scandals like the FTX collapse, which continue to influence vigilance and regulatory evolution within one of the world’s fastest-moving financial sectors.