Giovanni Cunti, CEO of Gate Europe, stated on Monday that crypto companies already licensed under the European Union's Markets in Crypto-Assets Regulation (MiCA) could still exit the market as compliance costs mount. Speaking on Cointelegraph's Chain Reaction, Cunti explained that stricter regulatory requirements have made it increasingly difficult for new entrants to compete, and some licensed firms may ultimately be unable to absorb the ongoing costs of operating under the framework. MiCA is the EU's regulatory framework for crypto assets, and the bloc's 18-month transition period ended on July 1, requiring crypto firms serving EU customers to operate under authorization or cease offering regulated services.
Gate Europe CEO Warns Licensed Firms May Exit Due to Compliance Costs
Cunti told Cointelegraph's Chain Reaction that some firms which acquired MiCA licenses will not be capable of sustaining the cost and resources needed to carry on the business in the long term. "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.
The July 1 deadline prompted several exchanges to restrict or withdraw services in parts of Europe while licensed firms began operating under the new regime. Binance, the world's largest crypto exchange by trading volume, was not able to secure a MiCA license before the deadline.
Stricter MiCA Requirements Could Drive Crypto Projects Outside Europe
Cunti warned that MiCA's stricter regulatory requirements could drive some crypto startups and projects outside Europe. While the framework has strengthened investor protections, he said it leaves less room for innovation than jurisdictions with lighter rules. He said some projects may choose to launch in jurisdictions with less restrictive regulatory requirements instead of navigating the bloc's compliance regime.
"We may need to be prepared that some projects, possibly some important projects, may be looking at other jurisdictions with different guidelines," he said.
ESMA Register Shows 294 MiCA-Licensed Firms After Recent Additions
The number of companies authorized under MiCA continues to grow, albeit at a slower pace. On Friday, the European Securities and Markets Authority added 14 crypto-asset service providers (CASPs) to its register, bringing the total to 294 after adding 37 firms in ESMA's first update following the July 1 transition deadline.
Market Consolidation Creates Opportunity for Remaining Crypto Service Providers
Cunti said the higher regulatory burden is reshaping Europe's competitive landscape, but the shrunken market also presents an opportunity for those remaining crypto service providers. "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," he added.
FAQ
What did Gate Europe's CEO say about MiCA-licensed firms?
Giovanni Cunti stated on Monday that crypto companies already licensed under MiCA could still exit the EU market as compliance costs mount. He explained that some licensed firms may be unable to absorb the ongoing costs and resources required to operate under the framework in the long term.
When did the MiCA transition period end?
The EU's 18-month MiCA transition period ended on July 1, requiring crypto firms serving EU customers to operate under authorization or cease offering regulated services.
How many crypto firms are currently licensed under MiCA?
As of Friday, the European Securities and Markets Authority register shows 294 crypto-asset service providers licensed under MiCA. ESMA added 14 firms on Friday and had previously added 37 firms in its first update following the July 1 deadline.
