EBA Sounds Alarm: Crypto Firms Exploiting MiCA Loopholes Pose ‘Significant’ Threat to EU
The European Banking Authority (EBA) has warned that crypto companies might exploit regulatory gaps in the course of the Markets in Crypto-Assets (MiCA) regulation’s transitional section, posing a “vital menace” to the EU’s monetary system.
In its recent supervisory report, the EBA mentioned sure crypto service suppliers licensed earlier than MiCA’s full implementation in December 2025 may have interaction in “jurisdiction buying.”
This entails registering in EU member states with weaker oversight and utilizing passporting rights to function throughout the bloc.
The regulation got here totally into impact in late 2024, giving the 27-country financial bloc a unified algorithm governing crypto-asset suppliers for the primary time.
EBA Flags Weak Supervision Risks During MiCA Transition Period
According to the EBA, such actions may enable companies to evade stricter supervision, main to opaque governance, insufficient danger administration, and potential misuse of buyer funds.
The EBA cautioned that this conduct might lead to “uneven regulatory requirements” and create systemic vulnerabilities.
It urged nationwide authorities to apply constant supervision and be certain that companies licensed in the course of the transitional interval meet equal prudential and governance necessities to these that can apply as soon as MiCA is totally enforced.
The report emphasised the significance of cooperation between EU monetary regulators, warning that insufficient coordination may facilitate the exploitation of inconsistencies between jurisdictions by high-risk entities.
The EBA known as on member states to share details about license approvals and revocations to assist forestall regulatory arbitrage.
The authority additionally famous that cash laundering and terrorist financing (ML/TF) dangers stay high within the crypto sector.
Additionally, it emphasised that insufficient due diligence and inadequate oversight of cross-border actions may enable illicit flows to go undetected, thereby undermining MiCA’s goal of building a clear and safe digital asset market.
Under MiCA, crypto companies should receive authorization and adjust to strict operational, reserve, and disclosure necessities.
However, companies registered earlier than June 2024 below nationwide regimes might proceed working till the tip of 2025 with out assembly the brand new EU-wide requirements, a interval the EBA says might be “exploited by opportunistic actors.”
The EBA urged regulators to intensify their supervision throughout this window, recommending enhanced scrutiny of governance constructions, capital adequacy, and transaction monitoring techniques.
Additionally, it inspired companies to start aligning with MiCA’s danger administration and shopper safety necessities forward of time to keep away from disruptions as soon as the transition interval ends.
The warning comes because the EU prepares for full MiCA enforcement, which seeks to harmonize digital asset regulation throughout all 27 member states and set up clear guidelines for stablecoins, crypto custody, and repair suppliers.
EBA Advances MiCA Implementation With Draft Standards for Bank Crypto Exposure
The EBA continues to play a central position in shaping Europe’s crypto regulation following the implementation of the MiCA.
In January, the European Securities and Markets Authority (ESMA) directed crypto-asset service providers to delist stablecoins that don’t meet MiCA’s necessities, reinforcing earlier warnings from the EBA.
MiCA compliance required: Crypto-asset service suppliers should delist non-compliant stablecoins.#MiCA #ESMA $USDT #Stablecoinhttps://t.co/LNE1u6WlSq
— Cryptonews.com (@cryptonews) January 20, 2025
The regulator had already urged companies to assess their compliance standing and cease providing non-conforming tokens, indicating a coordinated effort amongst EU companies to tighten oversight.
To assist this framework, the EBA released draft Regulatory Technical Standards in August, outlining how banks and establishments should handle crypto exposures below the Capital Requirements Regulation.
The proposed guidelines set up capital therapy strategies for numerous classes of crypto belongings, starting from unbacked tokens like Bitcoin to asset-referenced and e-money tokens, and align intently with the Basel Committee pointers.
The EBA additionally eliminated its earlier “prudent valuation” requirement, simplifying fair-value assessments whereas introducing new aggregation strategies for lengthy and quick positions.
These measures search to strike a stability between innovation and monetary stability as European establishments broaden into digital belongings. Transitional guidelines will enable banks to keep restricted publicity whereas the EU develops a everlasting framework.
Over 50 companies have already been licensed below MiCA. Some say it’s a breakthrough, others concern it may handcuff Europe’s crypto future. This op-ed breaks down what’s working and what’s not.#MiCA #CryptoRegulationhttps://t.co/OsUt0mKiXl
— Cryptonews.com (@cryptonews) September 17, 2025
By September, over 50 companies, together with Coinbase, Kraken, and OKX, had secured MiCA licenses, gaining entry to all 27 EU markets below a unified rulebook.
Yet, compliance has confirmed to be demanding, with prolonged utility processes and phased rollouts creating operational uncertainty.
The put up EBA Sounds Alarm: Crypto Firms Exploiting MiCA Loopholes Pose ‘Significant’ Threat to EU appeared first on Cryptonews.
