EU Crypto Rule Changes Expose Exchange Customers to Rising Scam Risks

The European Union's (EU) new crypto regime has introduced a licensing deadline for crypto companies, leading to market disruption and increased scam risks for exchange customers.

Hundreds of exchanges have been disrupted as they struggle to obtain EU licenses, leaving customers searching for alternative providers. This transition has created opportunities for fraudsters who impersonate regulators and crypto companies, diverting client assets in the process.

The lack of transparency in account closures and transfers has made users more vulnerable to scams. Regulators warn that impersonation fraud is on the rise as scammers misuse AMF and ESMA identities.

Only 323 crypto companies have obtained EU licenses, while over 1,700 unlicensed firms must cease operations, including Binance, which remains unregulated in the EU. Large exchanges such as Coinbase, Kraken, and OKX have secured licenses under the regime.