MiCA Regulation Takes Effect in the EU, Tether's USDT Stablecoin Faces Scrutiny

The Netherlands has become one of the first European Union jurisdictions to grant crypto licenses under the bloc’s Markets in Crypto-Assets (MiCA) regulation, with MoonPay, Socios.com, and GSR Markets among the initial recipients.

As the December 30, 2024 deadline for MiCA adoption approaches, the Netherlands’ Autoriteit Financiële Markten (AFM) has granted the first batch of crypto licenses to three companies. This marks a significant step in bringing the European digital asset industry under a common legal framework.

The licenses were issued to payment service provider MoonPay, fan engagement platform Socios.com, and trading firm GSR Markets, enabling them to operate as Crypto Asset Service Providers (CASPs) throughout the European Economic Area (EEA).

MoonPay, co-founded by Iranian-American entrepreneur Victor Li, is known for its collaborations with celebrities and its role in facilitating NFT purchases. The company's rapid growth and high valuation have made it a symbol of the broader market enthusiasm for regulated crypto services in Europe.

“A New Era” in European Crypto, MoonPay CEO Says

MoonPay CEO Robert Altuch has hailed the Netherlands’ crypto licenses as ushering in “a new era” for the digital asset industry in Europe.

“The Netherlands has always been at the forefront of European crypto regulation, and these licenses are a testament to that,” said Altuch. “We're honored to be among the first companies to receive a MiCA license and to continue working with the Dutch AFM to advance the safe and responsible adoption of digital assets.”

The licenses come as the EU's crypto landscape is undergoing substantial changes. MiCA, which was introduced in 2020 and passed in 2023, establishes a uniform rulebook for digital assets, aiming to replace the patchwork of national regulations that have governed the sector.

Prior to MiCA, many crypto firms operating in the EU had to obtain multiple operating permissions in different countries due to the varying regulations. For instance, Binance was authorized to operate in France but faced legal challenges in the Netherlands, while Coinbase had a presence in Germany but not in France.

The new development aligns with the EU’s requirements that crypto firms be licensed as CASPs to serve customers throughout the bloc. While member states faced a December 30 deadline to adopt MiCA, not all jurisdictions have moved at the same pace. Observers say the Netherlands’ swift implementation underscores its position as a frontrunner in European crypto regulation.

Beyond the Netherlands, other jurisdictions are also taking steps to align with emerging EU norms. In Malta, Socios.com announced that it had obtained a Class 3 Virtual Financial Assets Act (VFAA) license from the Malta Financial Services Authority.

This authorization allows the company to operate as a regulated Virtual Financial Asset service provider under Maltese law, which officials say is compatible with MiCA rules. The platform, which enables fans to engage with their favorite sports teams through blockchain-based initiatives, had previously operated under an Innovative Technology Arrangement (ITA) with the Maltese regulator.

Meanwhile, in the United Kingdom, which has been closely following EU regulatory standards despite no longer being a member of the bloc, trading firm GSR Markets has been added to the crypto register.

The U.K.’s Financial Conduct Authority (FCA) has granted registration to GSR Markets, a Hong Kong-headquartered firm that is now legally permitted to operate a crypto exchange in the country. This move signals the U.K.’s intent to keep pace with Europe’s heightened focus on anti-money laundering and investor protection requirements in the digital assets sector.

GSR’s registration follows the FCA’s approval of crypto exchange CEX.IO in early December and comes amid a broader clampdown on digital asset firms in the U.K. Several companies, including Deribit and Huobi, have voluntarily closed their operations in the country due to regulatory pressure.

MiCA's Phased Implementation, Non-NFT Focus

MiCA’s overarching goal is to enhance legal clarity, protect investors, and curb market manipulation in the crypto sphere. The framework outlines a phased implementation, beginning with regulations on stablecoins, termed asset-referenced tokens (ARTs) and e-money tokens (EMTs).

The next stage involves the licensing of CASPs, with a transitional period allowing existing providers to continue operations while applying for full authorization.

Under MiCA, businesses that offer digital asset management, custody, or crypto-exchange services must adhere to stricter transparency and security requirements. Firms are expected to meet capital thresholds, publish clear whitepapers, and implement robust anti-money laundering measures.

Although non-fungible tokens (NFTs) and decentralized applications (dApps) generally fall outside MiCA’s scope, any token resembling a financial instrument could still prompt legal scrutiny.