Crypto Giants Gemini And Coinbase On Brink Of EU Licenses Amid Regulatory Tensions

Two of the world’s largest cryptocurrency exchanges, Coinbase and Gemini, are on the verge of securing licenses that would allow them to operate across the European Union, as regulatory discrepancies emerge among member states. 

Gemini And Coinbase Target Regulatory Licenses

According to Reuters, Gemini, the crypto trading platform founded by Tyler and Cameron Winklevoss, is expected to receive a license from Malta, the EU’s smallest member country. This follows Malta’s swift approvals of other crypto firms like OKX and Crypto.com earlier this year.

In parallel, Coinbase is reportedly nearing approval for a license in Luxembourg, which would make it the first US-based crypto company to be licensed under the new EU regulations. 

While the application has been in progress for several months, insiders suggest that Coinbase’s planned operations in Luxembourg will be “relatively modest.” 

A spokesperson for the company told Reuters that it employs around 200 people in Europe and is committed to investing in staff to ensure operational safety.

The anticipated approval for Coinbase comes amid cooling relations between the crypto industry and Ireland. The Central Bank of Ireland has recently expressed skepticism about cryptocurrencies, with its governor likening them to a Ponzi scheme.

Yet, the licensing process has drawn criticism from various national regulators who are concerned about the “speed and rigor of approvals.” 

EU Regulators Express Concerns Over Rapid Licensing

Under the new Markets in Crypto-Assets (MiCA) regulation, which aims to align crypto operations with traditional financial oversight, countries can issue licenses that enable crypto companies to function throughout the 27-member bloc. 

Some regulators fear that lax enforcement could undermine the regulatory framework’s objectives, potentially leading to issues such as fraud and market instability.

The rapid licensing in Malta has also raised eyebrows among other EU regulators, particularly those meeting under the European Securities and Markets Authority (ESMA). 

France’s Autorité des Marchés Financiers (AMF) has publicly warned that a lack of direct oversight from ESMA could lead to a “regulatory race to the bottom.” 

Concerns have also been voiced about the adequacy of regulatory staffing in countries like Malta, which may affect the robustness of their licensing processes.

In response, the Malta Financial Services Authority has stated that its expedited approvals are based on years of experience and a strict adherence to local anti-money laundering standards. So far, Malta has granted four crypto licenses since the new MiCA regime was introduced.

The ongoing debates within the EU highlight the complex dynamics between member states as they compete for international business. Per the report, while the EU operates as a unified trading bloc, individual countries vie for the attention of crypto firms, often leading to regulatory inconsistencies. 

Featured image from Shutterstock, chart from TradingView.com