CoinDesk
Europe's crypto industry crosses into a post-MiCA era this week with the bulk of its registered firms about to lose authorization to operate. Of more than 3,000 virtual asset service providers on the books as of 2024, only 231 have converted to MiCA licenses, a roughly 7.5% conversion rate that industry executives describe as a generational wipeout for the European market.
The European Securities and Markets Authority has already told unauthorized crypto-asset service providers to wind down their businesses in an orderly manner while safeguarding clients. National regulators can license firms under MiCA, and those licenses travel across the entire European Economic Area, replacing the patchwork of national registrations that preceded the framework.
Why it matters
The cost stack behind a single MiCA authorization, not the licensing regime itself, is what executives say will thin out the field. Patrick Gruhn, founder and CEO of Perpetuals.com, put year-one license costs at up to 700,000 euros for a lean firm and into the millions for a large exchange, with 12 to 24 months of runway typically needed before the first authorized trade. Firms that also want to process stablecoins need a separate Payment Institution or Electronic Money Institution license on top.
The pain is unevenly distributed. Poland alone had well over 1,400 of the pre-MiCA registrations, but Mateusz Kara, CEO of Morphic Financial Group, said only one Polish-rooted firm currently holds a MiCA license, opening the door to what he called the wipeout of Polish crypto. Erald Ghoos, CEO of OKX Europe, estimated that 80% of pre-MiCA players will not survive, and added that several firms have asked OKX to acquire them because they cannot afford compliance on their own.
Market impact
The near-term read is consolidation around a small group of well-capitalized CASPs, with custody and prime services the first beneficiaries as smaller venues offboard clients. BitGo, authorized by BaFin in Germany, is already pitching itself as a regulated home for wallets that smaller firms would otherwise have to shutter. Even Hogan Lovells partners tracking the transition say it is unclear whether national regulators will grant any meaningful leniency after the cut-off, and some member states have already pushed ESMA for tighter oversight.
Mike Belshe, CEO of BitGo, framed the 17% conversion figure as a setback against a backdrop of growing institutional momentum in Europe and plans for a regulated euro stablecoin.
Frequently asked questions
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What is the MiCA deadline on July 1 and what happens after it?
MiCA's transitional period expires on July 1. Firms that held pre-MiCA national registrations lose authorization to operate in the EU after that point unless they have obtained a MiCA license (CASP) from a national regulator, which then permits them to serve the entire European Economic Area.
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How many crypto firms in Europe have actually secured a MiCA license?
As of this month, about 231 crypto-asset service providers are authorized under MiCA, against more than 3,000 virtual asset service providers registered in Europe as of 2024. That works out to a conversion rate in the high single digits.
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Why are so many European crypto firms expected to shut down under MiCA?
Executives cite the cost stack rather than the rulebook. Year-one license spend can run to 700,000 euros for a lean firm and into the millions for a large exchange, with 12 to 24 months of runway needed before the first authorized trade. Firms that want to process stablecoins also need a separate PI or EMI license.
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Which European country is most exposed to MiCA-related closures?
Poland is the most exposed. It had well over 1,400 pre-MiCA registrations on its own, and domestic delays at the Polish Financial Supervision Authority mean almost no Polish-rooted firm currently holds a MiCA license, according to Morphic Financial CEO Mateusz Kara.
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Will EU regulators show leniency to unlicensed crypto firms after the July 1 cut-off?
Hogan Lovells partners tracking the transition say it remains unclear, but most expect limited leniency. Some national regulators have already pushed ESMA for tighter oversight, and at least one senior adviser at the firm expects a hardline stance starting July 1.
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