EU MiCA Regulation Now Fully Active, Cutting Licensed Crypto Firms to Hundreds

The European Union's Markets in Crypto-Assets (MiCA) regulation entered full force on July 1, 2026, mandating that any cryptocurrency service provider serving customers across the 27-nation bloc must hold a valid MiCA license or halt operations. Thousands of firms faced suspension as of midnight on June 30, leaving millions of European users in search of compliant platforms.

Industry lawyers and executives broadly acknowledged the arrival of a unified regulatory framework, but sharp disagreements emerged over whether MiCA levels the playing field or consolidates the market in favor of large, well-funded companies.

Joseph Borg, a Maltese lawyer and partner at WH Partners who has advised crypto firms since 2016, warned that the number of licensed operators in Europe could shrink dramatically. He estimated the continent may go from roughly 3,000 registered crypto asset service providers down to only 300 or 400 firms holding MiCA licenses. Borg attributed the contraction partly to regulators' preference for a smaller, more manageable pool of operators. 'I'm noticing that regulators are becoming more and more lazy,' Borg said. 'They prefer having 20 operators to regulate rather than invest in more technology and more human resources to supervise more operators.'

Borg also pointed to compliance costs as a structural barrier. While MiCA itself does not explicitly favor large firms, he said the technical standards and supervisory expectations introduced alongside the regulation make it significantly harder for startups to compete. Some smaller firms, he noted, have already begun looking at alternative jurisdictions, including Dubai.

Not all executives share that view. Alex Fazel, chief partnership officer at SwissBorg — which secured its MiCA license through France's financial markets regulator — argued that the licensing process is less about company size and more about demonstrating operational transparency. 'A MiCA license is not something you can buy because you have money and power,' Fazel said. 'It is making sure every process is fully transparent.' He nonetheless conceded that the capital requirements for obtaining and maintaining a license place a disproportionate burden on early-stage companies. 'If there's one segment I feel bad for, it's startups,' he said. 'Innovation may suffer for companies that don't have enough capital.'

Enforcement against unlicensed offshore platforms represents a separate and unresolved concern. Lin Han, founder and CEO of Gate Group, said licensed exchanges have invested years and substantial resources preparing for MiCA, but the framework only delivers its intended benefits if all market participants comply. 'Everybody needs to follow the rule,' Han said. 'Then we can compete on better service for users.'

The European Securities and Markets Authority (ESMA) has stated that firms serving EU clients without MiCA authorization are in breach of EU law and must cease offering those services. ESMA has also cautioned firms against relying on 'reverse solicitation' as a workaround and has encouraged measures such as geo-blocking to restrict access by European users. Whether regulators have sufficient resources to enforce compliance against offshore platforms operating outside EU jurisdiction remains an open question among industry leaders.