Crypto Firms Poised for EU Market Entry Amid Regulatory Frictions

Two leading crypto platforms are reportedly set to receive regulatory approval allowing them to operate across the European Union, amid growing tensions between national authorities over the pace and standards of crypto oversight.

Gemini, the digital asset exchange founded by Tyler and Cameron Winklevoss, is expected to be granted a licence by Malta, while Coinbase is likely to secure approval from Luxembourg. Both developments come under the framework of the EU’s recently implemented Markets in Crypto-Assets (MiCA) regulation, which allows for cross-border authorisation of crypto firms within the 27-nation bloc.

Sources familiar with the matter, who spoke on condition of anonymity to Reuters due to the sensitivity of ongoing discussions, said the approvals have become a flashpoint among EU regulators. Critics argue that some countries are advancing too quickly, potentially compromising the integrity of the regulatory framework and prompting what one official described as a “race to the bottom”.

Under MiCA, national authorities are empowered to grant licences that are valid across the Union. However, concerns have emerged during closed-door meetings coordinated by the European Securities and Markets Authority (ESMA) over the speed at which licences are being issued, particularly by smaller member states.

Malta, which has already approved OKX and Crypto.com since MiCA entered into force earlier this year, is now set to licence Gemini. A spokesperson for the Malta Financial Services Authority (MFSA) confirmed that four crypto licences have been issued to date and attributed the speed of processing to the country’s prior experience with digital finance regulation. The MFSA emphasised that Malta’s standards for anti-money laundering compliance remain stringent.

Nonetheless, scepticism remains among other EU regulators. A senior official expressed doubts about the supervisory capacity of smaller states such as Malta, citing limited regulatory staffing. ESMA has reportedly reviewed Malta’s procedures, with a report expected to be circulated shortly, though the agency declined to comment formally.

France’s financial regulator, the Autorité des marchés financiers (AMF), has already issued a public warning that the lack of direct ESMA oversight may lead to inconsistent enforcement and regulatory arbitrage. The AMF’s concerns echo broader apprehensions that a fragmented approach could undermine MiCA’s aim of bringing cryptocurrencies under a harmonised EU regulatory structure.

Meanwhile, in Luxembourg, Coinbase is nearing completion of its licensing process. The U.S.-based firm, which last year became the first crypto-focused company to join the S&P 500, is expected to establish a relatively modest presence in the Grand Duchy initially. A source familiar with the company’s plans said around 20 staff would be based in Luxembourg by the end of 2025.

Coinbase, which already employs 200 people across Europe, declined to comment on the specifics of the application but stated that compliance and operational safety remained central to its strategy. It also described Luxembourg as a “high-bar” jurisdiction within the global financial system.

Luxembourg’s financial regulator did not respond to media requests, but a person familiar with its stance said the jurisdiction maintains rigorous standards and dismissed criticisms as being driven by competitive interests among EU states vying to attract digital asset firms.

The expected approval of Coinbase by Luxembourg is viewed by some as a setback for Ireland. Dublin had previously been considered a favoured location for large tech firms, but relations with the cryptocurrency industry have cooled in recent years. In 2023, Central Bank Governor Gabriel Makhlouf drew sharp criticism from the sector after describing cryptocurrency as akin to a “Ponzi scheme”.

The backdrop to these developments is a global crypto market valued at approximately $3.3 trillion, which remains volatile. The 2022 collapse of U.S.-based exchange FTX, involving extensive fraud, continues to weigh on trust and regulatory scrutiny.

Within the EU, political discussions are ongoing about expanding ESMA’s remit to include direct supervision of crypto licensing. ESMA Chair Verena Ross has been vocal in calling for additional powers, though sources involved in talks among EU legislators said that some national governments remain reluctant to cede further authority to the Paris-based agency.

The diverging approaches highlight a broader structural tension within the Union. While the EU benefits from centralised regulation and market access rules, individual member states continue to compete for investment and market share, especially in emerging sectors like digital assets.

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