The EU Banking Authority is in the process of consulting the market on a more stringent method of calculating the MiCA fine. According to the proposal, a fine of up to 12.5 per cent of its annual turnover may be imposed if the issuer of the “significant” encrypted currency violates the EU digital asset rules. The date of release of the document was close to the date of 1 July for the licence of MiCA, and the pressure for compliance in the European encryption market is rising.
Maximum fines and method of calculation
This advisory document was issued on 26 June and proposes a two-step calculation of the fine. The regulator will first assess the gravity of the violation and then adjust the final amount to the aggravating or mitigating circumstances.
According to the proposal, the statutory maximum penalty for the issuer of the reference currency for significant assets could be 12.5 per cent of the annual turnover and the maximum for the issuer of the significant electronic currency 10 per cent. If the violation results in a clear gain, the fine may also be doubled to the amount of the offence.
According to EBA, this approach is aimed at reducing differences in enforcement between member States by allowing EU regulatory bodies to apply more consistent standards of punishment in the implementation of MiCA.
July 1st.
MiCA has established a unified regulatory framework for the EU digital asset market. For token issuers and encrypted asset service providers to continue to operate within the EU, they need to meet licensing, capital, consumer protection and compliance requirements.
As the 1 July deadline approaches, encryption companies need authorization from the regulatory bodies of member States before they can continue to provide services or promote stable currency products in the EU. Enforcement action may be faced if the business continues to operate without authorization or if there are issues such as unauthorized disclosure and failed organizational compliance.
This consultation will continue until 28 September, when industry participants can provide feedback before the formal methodology is finalized.
Trading platform for European business restructuring
Some platforms have begun to adjust the European market layout before the new landing. In the absence of a MICA mandate by the deadline, coins have begun to restrict some EU operations. Reports indicate that François has withdrawn his MiCA application in Greece and that he plans to seek re-ratification through other EU member States.
At the same time, the platform that has been authorized by the MiCA is seeking to take over the outgoing users. Coinbase introduced a turnover incentive in a number of European markets, offering a 5 per cent transfer incentive to eligible users, as of 13 July. OKX has also introduced the Welcome Award and up to 8% of the cash matching programme in the EEA.
Overall, MiCA is moving from the licensing phase to a more explicit enforcement phase. For issuers and trading platforms, the focus of future operations in the EU is shifting from “market access” to “sustainable compliance with uniform compliance requirements”.