EU Crypto Rules Spark Backlash Over Fast-Track Licenses

As Europe rolls out its new MiCA rules, major crypto companies are lining up to get licensed and operate across the EU. But some regulators are worried that things are moving too fast.

According to Reuters, Gemini, the crypto platform founded by billionaire twins Tyler and Cameron Winklevoss, is about to receive a license in Malta, the EU’s smallest country. This would give them the green light to operate across all 27 member states. 

This comes shortly after Malta approved licenses for OKX and Crypto.com, just weeks after MiCA came into effect. 

Malta’s Fast-Track Approvals Face Scrutiny

Malta’s fast approvals are raising eyebrows among EU regulators, especially under the watch of the European Securities and Markets Authority (ESMA). France’s AMF has warned that weak oversight could lead to a “race to the bottom.” One official even raised concerns over whether countries with smaller regulatory teams, like Malta, can provide adequate oversight. 

ESMA is now reviewing Malta’s process and is expected to release a report soon. 

In response, Malta’s regulator said that it has issued four licenses so far, and credited its speed to its past experience and the “in-depth understanding acquired over the years.” Malta’s regulator said it follows strict anti-money laundering rules. OKX also called the process rigorous and said that compliance is a top priority.

Coinbase Eyes Luxembourg License

Elsewhere, Luxembourg is soon expected to approve a license for Coinbase, the first U.S. crypto firm in the S&P 500. While its team there may be small, Coinbase has 200 staff in Europe, and it plans to hire 20 more in Luxembourg by the end of the year.

Luxembourg pushed back on claims that it is being too lenient on crypto. It suggested that other countries might just be trying to win over crypto firms. Notably, Coinbase’s move is seen as a setback for Ireland, whose central bank once compared crypto to a Ponzi scheme.

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EU Split on MiCA Enforcement

At the centre of the issue is keeping the multi-trillion-dollar crypto market in check. MiCA is designed to bring crypto under the same regulatory standards as traditional finance, but if countries apply the rules differently, it could weaken MiCA’s overall impact.

Countries are still divided in the EU over how to enforce crypto rules. There are ongoing talks about giving more power to ESMA. ESMA’s chief Verena Ross wants stronger oversight, but some countries are hesitant to increase their authority. 

How these early licenses are handled will likely set the tone for how the EU balances crypto growth and investor protection going forward.

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