MiCA Triggers Massive Crypto Industry Shakeup Across Europe

Four in Five Firms Left Without a License

Europe's crypto industry has undergone a sharp consolidation following the expiry of MiCA's transitional period. MiCA's grandfathering period, the window that let firms already operating under national rules keep going, ended on July 1, 2026, dividing the European Economic Area's crypto service providers into those that gained authorization and those that did not.

Roughly one in five of the EEA's crypto service providers, 281 of 1,343, had gained MiCA authorization when the grandfathering period ended. The remaining 1,062 must now exit, restructure, or move their customers to an authorized firm.

MiCA officially came into force on December 31, 2024, with the regulation designed to replace the previously fragmented approach with a single set of rules for all 27 EU member states. Under the new framework, crypto firms can secure a single license with passporting rights across all 27 EU member states, avoiding the need to secure a national license in each jurisdiction.

Uneven Results Across Jurisdictions

The authorization process has produced sharply different outcomes depending on the country. Eight firms obtained authorization in Lithuania from a previous register containing more than 400 providers, while Poland issued none despite its old register exceeding 1,800 entries. Greece and Portugal also issued no home authorizations in TRM's dataset.

In contrast, by May, the ESMA register contained 204 authorized CASPs, with Germany accounting for 55, followed by the Netherlands with 25 and France with 17. Malta, Cyprus, Ireland and Luxembourg together accounted for 63 of 272 home authorizations identified by TRM, even though only 101 operating firms came from their previous registers.

The risk profile of the two groups is also starkly different. TRM found that 12% of firms without authorization carry a High or Severe risk rating, compared with 2% of authorized providers, while every firm assigned a Severe rating belonged to the unauthorized group. TRM Labs concluded that MiCA has concentrated Europe's crypto market among more regulated providers, effectively filtering out higher-risk operators in the process.

The longer-term impact of the regulation could extend well beyond Europe. MiCA may serve as a model for other regulators worldwide who are considering introducing or adapting laws to address crypto market needs, potentially leading to a more unified regulatory landscape for crypto and Web3 projects globally.

Sources:
TRM Labs: EU VASPs After MiCA, Authorization Rates and Illicit Exposure
Crypto.news: MiCA deadline left 1,062 EEA crypto firms without authorization
BeInCrypto: MiCA is Turning Europe Into a Licensing Test for Every Type of Crypto Company