Nikolas Sargeant
Two major cryptocurrency exchanges are poised to gain access to the entire European Union market under the bloc's new regulatory framework, even as tensions mount among national regulators over licensing standards. Gemini, the crypto trading platform founded by billionaire twins Tyler and Cameron Winklevoss, is on the verge of receiving a licence to operate from Malta, while Coinbase is expected to secure approval from Luxembourg. These licenses would grant both companies EU-wide operating privileges under the Markets in Crypto-Assets (MiCA) regulation that took effect earlier this year.
The rapid pace of approvals has sparked controversy among European financial watchdogs, with some questioning whether smaller jurisdictions are maintaining adequate oversight standards. France's AMF has publicly warned that ESMA's lack of direct authority could lead to a regulatory race to the bottom, while other officials express concern about accepting licenses from countries with fewer regulatory staff. Malta has already approved OKX and Crypto.com within weeks of MiCA's introduction, drawing particular scrutiny from peer regulators.
The licensing debate reflects broader challenges facing the EU's attempt to harmonize crypto regulation across its 27 member states. At stake is oversight of the multi-trillion-dollar cryptocurrency industry, which regulators warn could facilitate fraud and market instability without proper supervision. MiCA aims to bring crypto under the same regulatory umbrella as traditional finance, but uneven enforcement threatens to undermine these goals as countries compete to attract lucrative crypto businesses.
The regulatory tensions come as European politicians consider expanding the powers of ESMA, the bloc's securities watchdog, to provide more centralized oversight. While the European Union is united as a trading bloc and writes much regulation centrally in Brussels, countries vie with each other to attract international businesses. The outcome of this regulatory rift could determine whether the EU achieves its goal of creating a unified, well-supervised crypto market or sees fragmented standards that potentially compromise investor protection.
