Crypto Exchanges Coinbase and Gemini Nearing EU Regulatory Approvals
Crypto exchanges Coinbase and Gemini are on the brink of securing regulatory approvals that will allow them to operate across the European Union, as reported by Reuters on June 16, citing sources familiar with the matter.
The impending approvals have caused tensions among national regulators regarding the speed and oversight of new licensing under the EU’s Markets in Crypto-Assets (MiCA) regulation, which came into effect earlier this year. This regulation enables any member state to issue a license that grants access to the entire 27-nation market.
Although seen as a positive step towards aligning crypto oversight with traditional finance, some regulators are concerned that inconsistent enforcement could lead to regulatory blind spots in an industry valued at approximately $3.3 trillion.
Gemini’s Approval in Malta
Sources indicate that Gemini is nearing approval in Malta, a country that has already approved licenses for OKX and Crypto.com shortly after the implementation of MiCA. Malta attributes its efficient process to years of experience in supervising crypto businesses.
A spokesperson for the Malta Financial Services Authority mentioned that four crypto licenses have been issued so far, with strict money-laundering checks in place. Additionally, it was revealed that the European Securities and Markets Authority (ESMA) has evaluated Malta’s licensing procedures and is preparing an internal report, although ESMA declined to comment on the matter.
France’s financial markets regulator has expressed concerns about ESMA’s lack of direct licensing authority, fearing a potential “race to the bottom” as countries compete to attract profitable crypto businesses.
Coinbase’s Pursuit of Luxembourg License
Luxembourg is expected to grant a license to Coinbase, marking the first approval for a US-listed crypto firm under MiCA. Coinbase, now part of the S&P 500, plans to expand its Luxembourg office by over 20 employees this year, according to a company spokesperson.
While Luxembourg’s financial supervisor did not comment on the pending application, an official familiar with the matter dismissed claims that the country’s standards are too lenient, attributing such criticisms to competition aiming to attract crypto firms elsewhere.
The EU’s internal divisions over licensing come at a time when lawmakers are discussing expanding ESMA’s authority to ensure consistent enforcement of MiCA regulations in light of potential risks posed by deregulation in the US.
Although Brussels establishes regulatory frameworks, national agencies retain licensing powers, a system that is now under scrutiny in one of the rapidly evolving financial sectors globally.
The outcomes of these approvals could significantly influence how Europe balances investor protection with aspirations to become a leading global crypto hub, especially considering past industry scandals like FTX’s collapse in 2022, which continue to influence regulators’ efforts to keep pace with innovations.
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