Opinion by: Slava Demchuk, co-founder and CEO of AMLBot
All digital asset service suppliers (VASPs) registered within the EU earlier than 2025 should adjust to Markets in Crypto-Belongings Regulation (MiCA) necessities this 12 months. Not all will probably be in a position to take action.
The MiCA regulation is, in essence, a superb authorized framework for the crypto trade, but it surely additionally has some disadvantages, particularly for crypto startups and small companies.
Trying on the case of Estonia and its implementation of crypto licenses in 2017, it's doable to foretell that round 75% of VASPs might want to stop their operations within the EU.
What occurred in Estonia with crypto licenses?
In 2017, Estonia was one of many first EU member states to introduce a crypto licensing course of. Getting a crypto license (a VASP registration) was simple and quick. No bodily presence, share capital requirement, or proof of getting sound Anti-Cash Laundering (AML) and Know Your Buyer (KYC) techniques in place had been required. The consequence? By 2019, Estonia had issued round 2,000 crypto licenses.
Beginning in 2019, nonetheless, Estonia adopted a number of amendments to the legislation, incorporating necessities just like MiCA. As a consequence, the vast majority of licensed crypto corporations weren't capable of adjust to new necessities and misplaced their licenses. Immediately, Estonia has solely round 45 licensed crypto companies.
Present scenario within the EU with VASP registration
Comparable conditions will happen in international locations with gentle VASP registration necessities, equivalent to Poland and the Czech Republic. There are round 1,600 VASPs registered in Poland, owing to the simple and quick technique of registering within the nation earlier than the MiCA implementation. With minimal necessities, one can open an organization and obtain a VASP registration in these international locations inside a couple of weeks.
These licensing processes utterly modified in 2025 when MiCA entered totally into drive. All of the registered VASPs should adjust to new necessities, which would be the similar no matter their nation of incorporation; in any other case, they are going to be required to stop their enterprise.
Current: 10 stablecoin issuers approved under EU’s MiCA — Tether is left out
Most of them won't be able to conform, based mostly on earlier expertise, equivalent to when 1,900 corporations misplaced their VASP registrations in Estonia. These license losses occurred on account of a number of key elements:
-
Their dimension: Many registered VASPs had been one-to-three-person corporations that supplied important trade in p2p platforms or over-the-counter. They won't have sufficient assets to adjust to strict MiCA necessities.
-
The associated fee: Buying a MiCA license is dear. It was beforehand doable to obtain VASP registration in Poland or the Czech Republic for two,000-4,000 euros. The value for a MiCA license is way more than that, usually round 30,000-80,000 euros, relying on the enterprise mannequin and nation of incorporation.
-
The necessities: Corporations that apply for a MiCA license should show they've many advanced processes in place, together with however not restricted to AML/KYC, information safety and cyber resilience. Subsequently, the corporate should rent many specialists and construct many processes. Primarily based on the variety of VASPs registered in Poland, these 1,600 VASPs might want to discover 1,600 AML/compliance officers (one per VASP) by July 2025 — when all VASPs in Poland shall adjust to MiCA — which have related information, experience and go the fit-and-proper take a look at. This will probably be almost inconceivable.
As well as, MiCA has excessive share capital necessities starting from 50,000 to 150,000 euros, relying on the providers an organization offers. Many presently registered VASPs are startups or small corporations whose income won't be able to cowl all the prices wanted to construct the processes talked about above and fulfill the share capital necessities.
The place does that go away the small companies and the startups? They won't be geared up to adjust to MiCA.
Opinion by: Slava Demchuk, co-founder and CEO of AMLBot.
This text is for common data functions and isn't supposed to be and shouldn't be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed here are the writer’s alone and don't essentially mirror or characterize the views and opinions of Cointelegraph.
