Gemini and Coinbase are configured to secure EU licenses

Two of the world’s largest cryptocurrency companies, Coinbase and Gemini are expected to obtain licenses to operate across the European Union under the new market for the block in Crypto-Assets (MICA) regulations.

MICA, which was enacted earlier this year, is permitted EU Member States Issues a license granting crypto companies access to all 27 member countries.

However, sources familiar with the issue say the licensing process has caused internal disputes between regulators, raising concerns across the pace and standards of approval in some jurisdictions. Two individuals who were described for the discussion that called for anonymity noted growing unease in private consultations about an inconsistent regulatory approach.

Malta’s rapid approval process sparks debate in a regulatory environment

Oversight of the multi-trillion dollar crypto industry is at risk. Regulators have repeatedly warned that the industry could lead to fraud, market instability and illegal financial activities without proper surveillance.

As a result, MICA aims to bring codes under the same regulatory roof as traditional finance. However, some people worry that uneven enforcement could undermine its purpose.

Meanwhile, Gemini, an American cryptocurrency exchange founded in 2014 by Cameron and Tyler Winclevos, is set to acquire a license to trade from Malta, Europe’s smallest country.

Malta previously granted licenses to OKX and Crypto.com a few weeks after announcing the new establishment. OKX said compliance is extremely important to the company after going through strict applications.

The speed at which Malta has granted these approvals has attracted the attention of other national regulators gathering under the European Securities and Markets Authority (ESMA). The French AMF has expressed concern that the lack of direct power in ESMA could lead to a “regulatory race to the bottom.”

Additionally, senior regulators who asked to remain anonymous used Malta as an example to mention concerns about accepting licenses from countries with fewer regulatory staff. According to one source, ESMA is currently investigating the licensing process in Malta, and reports on this will be shared soon.

Officials from the Malta Financial Services Authority said there are four cryptographic licenses. According to the representatives, they can act quickly for their experience and the rapid processing they have learned over the years.

Officials stressed that local money laundering regulations are strict. Esma has chosen not to comment on the issue.

One of the people said the regulatory debate was strengthened with hopes that Luxembourg would soon grant a license to Coinbase, the first US crypto-focused company to join the S&P 500.

Coinbase has been working on the application for several months, but another source said the scale of Coinbase’s intended operation in Luxembourg was relatively minor.

Still, Coinbase already has a prominent presence in Luxembourg. There, Coinbase Luxembourg SA will incorporate 30,000 euros of equity capital in the second half of 2024.

According to a business registry application, the subsidiary is overseen by four directors, including Caroline Tannock, Head of U.S. Financial and Operations Risk at Coinbase, and David Farmer, Vice President of Products. All directors are currently based in Luxembourg.

The company plans to expand its European workforce in at least 20 roles this year, in addition to its 200 employees across the continent.