Two of the world’s largest cryptocurrency exchanges, Coinbase and Gemini, are on the verge of securing licenses that would allow them to operate across the European Union, as regulatory discrepancies emerge among member states.
In parallel, Coinbase is reportedly nearing approval for a license in Luxembourg, which would make it the first US-based crypto company to be licensed under the new EU regulations.
While the application has been in progress for several months, insiders suggest that Coinbase’s planned operations in Luxembourg will be “relatively modest.”
A spokesperson for the company told Reuters that it employs around 200 people in Europe and is committed to investing in staff to ensure operational safety.
Yet, the licensing process has drawn criticism from various national regulators who are concerned about the “speed and rigor of approvals.”
Some regulators fear that lax enforcement could undermine the regulatory framework’s objectives, potentially leading to issues such as fraud and market instability.
The rapid licensing in Malta has also raised eyebrows among other EU regulators, particularly those meeting under the European Securities and Markets Authority (ESMA).
France’s Autorité des Marchés Financiers (AMF) has publicly warned that a lack of direct oversight from ESMA could lead to a “regulatory race to the bottom.”
In response, the Malta Financial Services Authority has stated that its expedited approvals are based on years of experience and a strict adherence to local anti-money laundering standards. So far, Malta has granted four crypto licenses since the new MiCA regime was introduced.
The ongoing debates within the EU highlight the complex dynamics between member states as they compete for international business. Per the report, while the EU operates as a unified trading bloc, individual countries vie for the attention of crypto firms, often leading to regulatory inconsistencies.
Featured image from Shutterstock, chart from TradingView.com
