MiCA compliance costs may force licensed EU crypto firms out
Europe's new crypto framework is triggering market consolidation as high compliance costs threaten to push newly licensed firms and innovative projects out of the region.
Obtaining a license under the European Union’s Markets in Crypto-Assets Regulation may not be enough to keep crypto firms in the bloc. Gate Europe CEO Giovanni Cunti warned that ongoing compliance expenses will likely force some newly authorized companies to abandon the European market despite securing the necessary regulatory permissions.
The EU’s MiCA transition period ended on July 1, requiring crypto-asset service providers to hold formal authorization or halt operations. The European Securities and Markets Authority registered 14 additional firms on Friday, bringing the total to 294 after an initial post-deadline surge of 37. Binance, the world’s largest exchange by trading volume, failed to secure a license before the deadline.
For investors and market professionals, this regulatory pivot represents a fundamental restructuring of European digital asset infrastructure. The framework successfully bolsters investor protections, but the associated compliance infrastructure is expensive to maintain. Cunti argued that this creates an uneven playing field that disadvantages newer startups and restricts technological innovation compared to jurisdictions with lighter oversight.
The financial strain extends well beyond the initial licensing phase. “I think there are going to be quite a few more of the ones that acquire MiCA license that will not be capable to sustain the cost and the resources that are needed to carry on this business in the long term,” Cunti said. This dynamic risks shifting early-stage project development and capital formation to more permissive regulatory environments.
However, the shrinking operator base presents a clear consolidation opportunity for the surviving, well-capitalized firms. As unlicensed exchanges restrict or withdraw services, their customers are actively migrating to compliant platforms. “There was a market with thousands of operators, and now there is a market with only hundreds,” Cunti said. “So definitely there is a big opportunity for all of us. There is an ongoing migration because customers do not want to lose access to this market.”
