EBA Warns of Crypto Firms Exploiting MiCA Transitional Loopholes
The European Banking Authority has flagged potential risks as crypto firms navigate the transitional phase of the Markets in Crypto-Assets regulation. Firms authorized before MiCA's full implementation in December 2025 could engage in jurisdiction shopping—registering in EU states with weaker oversight while operating bloc-wide through passporting rights.
This regulatory arbitrage threatens to create uneven standards across the 27-nation economic union. The EBA's supervisory report highlights concerns about opaque governance structures and inadequate risk management among firms exploiting these gaps. Systemic vulnerabilities may emerge if unchecked.
MiCA, which became fully effective in late 2024, represents the EU's first unified framework for crypto asset providers. The transitional period now presents a critical test for regulatory harmonization.
