EBA Proposes Tougher Penalties for MiCA Violations

Crypto companies operating in the European Union are being warned to prepare for tougher penalties for breaching the Markets in Crypto-Assets (MiCA) regulation. The European Banking Authority (EBA) has proposed a new framework designed to harmonize how sanctions are imposed across all EU member states.

Under the proposal, issuers of significant asset-referenced tokens could face fines of up to 12.5% of their annual turnover. Issuers of significant electronic money tokens (EMTs) would face penalties of up to 10% of annual turnover. In certain cases, regulators could also impose fines worth up to twice the profits gained from violating the rules.

The draft, published on June 26, outlines a standardized methodology for calculating penalties. Supervisory authorities would first assess the severity of the infringement before taking any aggravating or mitigating factors into account. According to the EBA, the goal is to ensure that sanctions are applied consistently throughout the European Union.

The proposal comes just ahead of a major regulatory deadline for the crypto industry. Starting July 1, all companies providing crypto-asset services in the EU must hold a MiCA license issued by their national regulator. Without authorization, firms will no longer be allowed to legally offer crypto services or issue stablecoins within the EU market. Businesses that fail to comply may face enforcement actions and financial penalties under the new framework.

The public consultation on the proposal will remain open until September 28. During this period, market participants can submit feedback before the EBA finalizes the new rules.

The regulatory changes are already affecting the industry. Binance, which failed to secure a MiCA license before the deadline, is scaling back parts of its European operations. The exchange has withdrawn its licensing application in Greece and announced plans to seek approval in another EU member state. From July 1, Binance will stop accepting new customers from the European Union while limiting certain services for existing users, although withdrawals will remain available.