Cryptocurrency giants on the verge of joining the European Union, experts warn

Under the new EU Markets in Crypto-Assets Regulation (MiCA), which came into force earlier this year, member states can issue licenses that allow cryptocurrency firms to operate across the bloc .

Cryptocurrency companies unhappy with the pace of obtaining permits

As Reuters reports, some of these companies have raised concerns in closed meetings about the speed at which the licenses are being granted. But the stakes are enormous: overseeing a multi-trillion-dollar cryptocurrency sector that has the potential to facilitate fraud, create market instability and facilitate illicit financial flows.

MiCA aims to bring cryptocurrencies under the same regulatory umbrella as traditional finance, but some stakeholders worry that uneven enforcement could undermine its goals.

Gemini is to enter the EU via Malta - the smallest country in the Community

Gemini, a U.S.-based cryptocurrency trading platform founded by billionaire twins Tyler and Cameron Winklevoss, is on the verge of receiving a license to operate in Malta, the smallest country in the European Union , according to sources familiar with the matter.

The pace of approval of the Maltese license has piqued the interest of other national regulators, which meet under the umbrella of the European Securities and Markets Authority (ESMA). The French AMF (the equivalent of the Polish KNF) has publicly warned that ESMA’s lack of direct powers could lead to a “regulatory race to the bottom.”

There is concern in the EU financial supervision community that licences will be granted in countries where regulators employ fewer staff – such as Malta.

A spokesman for the Malta Financial Services Authority told Reuters that it had so far granted four cryptocurrency licenses and was able to act quickly due to its experience, adding that the “accelerated processing” was a result of the “deep understanding gained over the years.”

Coinbase to Enter EU Through Luxembourg – “Global Financial Center”

The debate over Gemini and Malta comes against the backdrop of another pending deal - between Coinbase, a US crypto giant that recently joined the S&P 500, and Luxembourg .

While the application has been pending for several months, the source cited by Reuters pointed to the relatively modest size of Coinbase’s planned operations in Luxembourg.

A Coinbase spokesperson did not comment on the filing, but said the company employs 200 people in Europe and is investing in staff to ensure secure operations, and that Luxembourg is a “highly respected global financial center,” and that Coinbase will hire more than 20 people there by the end of the year.