Crypto Firms Exploit MiCA Transition Period to Evade EU Oversight
The European Banking Authority warns that cryptocurrency service providers are leveraging regulatory gaps during MiCA's implementation phase. Firms engage in jurisdictional arbitrage, seeking authorization in lenient markets before operating across the EU.
Two concerning practices dominate: forum shopping and abusive reverse solicitation. Companies denied licenses in strict jurisdictions simply reincorporate elsewhere, while others exploit cross-border service loopholes. These tactics create uneven competition and elevate money laundering risks.
While MiCA establishes stronger anti-money laundering frameworks, its effectiveness hinges on coordinated enforcement. National regulators must share intelligence and align supervisory approaches to prevent regulatory evasion.
