Europe's Crypto Sector Enters New Phase of Mergers and Acquisitions

The European Union's landmark cryptocurrency regulation, Markets in Crypto Assets (MiCA), has reached a milestone as many firms have secured their licenses. However, this achievement may not be the end of the regulatory journey for the industry.

With ongoing costs associated with operating under comprehensive regulations, the next chapter for Europe's crypto sector is expected to involve mergers and acquisitions between crypto-native companies and established financial institutions.

According to Steven Lightstone, a partner at Morgan Lewis' London office, the Financial Conduct Authority (FCA) in the UK is proposing a crypto framework that would integrate crypto firms into Britain's existing financial services regime. This means businesses would face familiar prudential, operational, and client asset requirements.

'A crypto firm will be treated like any normal traditional financial institution,' Lightstone said. 'It will still be hard to get FCA authorization.'