The EU’s new Markets in Crypto-Assets (MiCA) regulation is facing a significant test as member nations have expressed concern over the potential effect of approvals by relatively small nations. A section of the EU, under the umbrella of the European Securities and Markets Authority (ESMA), is scrutinizing Malta’s rate of issuing operational licenses to crypto companies.
MiCA came into effect earlier this year. It is a universal license allowing crypto companies to operate throughout the 27-nation bloc. Hence, once a crypto firm acquires the MiCA license from any of the member nations, it could operate across the entire region without regulatory restrictions.
Fears Grow Over Regulatory Oversight in Smaller Nations
A few months after MiCA’s launch, a section of the member nations is worried about the potential of indiscriminate regulatory approvals. Gemini’s almost-ready license from Malta to operate across the EU region has raised some eyebrows. The concern may not necessarily be because of the parties involved, but the relative swiftness of achieving such an approval.
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Besides Gemini, Coinbase is reportedly close to acquiring the MiCA license from Luxembourg, another relatively small nation within the EU region. It is worth noting that Malta granted similar approvals to OKX and Crypto.com within weeks of launching the new regulatory regime.
Maltese Regulator Defends Its “Expedited” Licensing Process
Stakeholders commenting on the issue cited Malta’s size as a concern for the current system. They believe regulators in the country have few staff and cannot adequately match the influx of companies aiming to capitalize on the country’s crypto-friendliness to obtain the MiCA license. Such stakeholders think countries like Malta should be subjected to more supervision to ensure proper compliance with industry requirements.
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Despite ongoing criticism, a Malta Financial Services Authority spokesperson has dismissed fears of irregularities. According to the spokesperson, the country could move quickly because of its experience. He noted that Malta had acquired an in-depth understanding of the crypto industry over the past years. Hence, it could engage in “expedited processing.”
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