MiCA Deadline Leaves Over 1,000 EEA Crypto Firms Without Authorization
More than 1,000 European Economic Area (EEA) crypto service providers have lost their authorization under the Markets in Crypto-Assets Regulation (MiCA), leaving them unable to operate within the EU. According to TRM Labs, only 281 of the 1,343 firms operating across the EEA secured MiCA authorization by July 1. This means that more than 70% of these providers are no longer licensed to offer crypto services in the region.
The unauthorized firms include a number of high-risk exchanges and payment companies. TRM found that 12% of these firms carry a High or Severe risk rating, compared with only 2% of authorized providers. Furthermore, unauthorized firms sent $5 billion directly to sanctioned counterparties, three times the amount recorded among authorized firms.
The uneven application of MiCA authorization has raised concerns about the regulation's effectiveness in protecting consumers and preventing illicit activity. The European Securities and Markets Authority (ESMA) register now contains 300 authorized crypto-asset service providers, but a significant number of firms remain outside the regime. Customer transfers are creating a new supervisory challenge for regulators as they attempt to ensure that these firms do not continue to operate without proper oversight.