Coinbase and Gemini, two of the largest cryptocurrency firms globally, are set to obtain licenses to operate across the European Union under the bloc’s new Markets in Crypto-Assets (MiCA) regulation.
MiCA, which came into force earlier this year, allows EU member states to issue licenses that grant crypto companies access to all 27 member countries.
However, sources familiar with the matter say the licensing process has sparked internal disputes among regulators, with concerns raised over the pace and standards of approvals in some jurisdictions. Two individuals briefed on the discussions, who requested anonymity, noted growing unease in private talks about inconsistent regulatory approaches.
Malta’s quick approval process sparks debate in the regulatory landscapeÂ
The supervision of the multi-trillion-dollar crypto industry is at risk. Regulators have repeatedly warned that this industry could lead to fraud, market instability, and illegal financial activities without proper oversight.Â
As a result, MiCA is seeking to bring crypto under the same regulatory roof as traditional finance. However, some people worry that uneven enforcement might weaken its objectives.Â
Meanwhile, Gemini, an American cryptocurrency exchange founded in 2014 by Cameron and Tyler Winklevoss, is set to obtain a license to trade from Malta, the smallest country in Europe, two people familiar with the matter said.
Malta previously granted licenses to OKX and Crypto.com just weeks after unveiling its new regime. OKX said it went through a rigorous application and that compliance is extremely important to the company.
The speed at which Malta is granting these approvals has caught the attention of other national regulators who gather under the European Securities and Markets Authority (ESMA). France’s AMF has expressed concern that ESMA’s lack of direct power might result in a “regulatory race to the bottom.”Â
Moreover, a senior regulatory official, who asked to remain anonymous, mentioned worries about accepting licenses from countries with fewer regulatory staff, using Malta as an example. According to one source, ESMA is currently examining Malta’s licensing process, and a report on this will be shared soon.Â
Malta Financial Services Authority officials said that they have four crypto licenses. According to the representative, they can act quickly because of their experiences and the expedited processing they learned over the years.
The authority emphasized that its local money laundering regulations are stringent. ESMA chose not to comment on the matter.Â
Coinbase nears Luxembourg license as EU expansion plans accelerate
One of the people said that the regulatory debate has intensified with expectations that Luxembourg will soon grant a license to Coinbase, the first US crypto-focused company to join the S&P 500.
While Coinbase had been working on its application for several months, another source said that the size of Coinbase’s intended operations in Luxembourg is relatively minor.
Still, Coinbase already has a notable presence in Luxembourg, where it incorporated Coinbase Luxembourg SA in late 2024 with a share capital of €30,000.
According to business registry filings, the subsidiary is overseen by four directors, including Caroline Tarnok, Coinbase’s US Head of Financial and Operational Risk, and David Farmer, VP of Products. All directors are currently based in Luxembourg.
The company plans to expand its European workforce by at least 20 roles this year on top of its 200 employees across the continent.
