Coinbase and Gemini are preparing to secure licenses that will enable them to operate across the European Union under the bloc’s newly implemented Markets in Crypto-Assets (MiCA) regulation. The framework, introduced earlier this year, allows member states to grant licenses that offer passporting rights across all 27 EU countries.
MiCA is designed to place the crypto sector under unified financial regulations to prevent market abuse, fraud, and illegal activities. However, the licensing process has triggered concerns among regulators over the speed and quality of approvals in some jurisdictions. Two individuals familiar with internal discussions have pointed to rising tension over varying standards of enforcement.
Malta’s approval pace raises regulatory concerns
Gemini is expected to obtain its MiCA license through Malta, according to two sources aware of the exchange’s application. Malta has already granted licenses to firms like OKX and Crypto.com shortly after launching its regulatory framework. OKX said it followed a thorough process and stressed the importance of compliance.
Malta’s rapid licensing has drawn attention from other regulators under the European Securities and Markets Authority. Officials at France’s AMF have expressed concern that ESMA’s lack of enforcement authority could spark a “race to the bottom” among countries. A senior regulatory source highlighted the risk of accepting licenses from states with limited regulatory capacity, citing Malta as a case in point.
Malta’s Financial Services Authority defended its fast turnaround, stating that it issued four licenses under the current framework and benefits from years of experience in financial regulation. The authority also underlined the strength of its anti-money laundering standards. ESMA declined to comment, though it is reviewing Malta’s process and is expected to release a report.
Coinbase targets license in Luxembourg
Coinbase is nearing approval for a license from Luxembourg, which would support its broader strategy for European growth. One source said the license would allow the company to expand across the EU, even though its planned operations in Luxembourg are relatively modest in scale.
Coinbase has been present in Luxembourg since late 2024 through its local entity Coinbase Luxembourg SA. The firm has a share capital of €30,000 and is directed by senior executives including Caroline Tarnok and David Farmer, who are both based in Luxembourg. The company also plans to increase its European workforce by at least 20 positions this year, adding to its 200 existing employees in the region.