The European Banking Authority (EBA) has released a detailed penalty framework targeting cryptocurrency issuers that violate the European Union’s newly introduced digital asset regulations. This move strengthens enforcement under the Markets in Crypto-Assets (MiCA) regulation, the EU’s first comprehensive legal framework for digital tokens.
The EBA’s proposal establishes a two-step process to determine fines, first evaluating the severity of an infraction and then adjusting the penalty based on aggravating or mitigating circumstances. The fines can reach significant amounts, capped at 12.5% of an issuer’s annual turnover for significant asset-referenced tokens and 10% for significant e-money tokens. Alternatively, penalties may equal twice the profits linked to the violation, underscoring the EU’s intent to deter major players in the digital asset market.
This regulatory crackdown coincides with the July 1 deadline when crypto firms must obtain formal licenses from national authorities across the 27 EU member states to operate legally. Companies that fail to secure these licenses risk suspension of activities and exposure to the fines outlined by the EBA.
The licensing requirement aims to replace the previous transitional period during which many operators functioned under fragmented local regulations. The upcoming enforcement will standardize compliance rules, demanding bank-like oversight, consumer protection measures, and minimum capital requirements.
One high-profile casualty of these changes is Binance, the world’s largest cryptocurrency exchange, which announced restrictions on EU user services starting July 1 due to its failure to secure MiCA approval. The exchange ceased onboarding new European clients and limited account functions after withdrawing its MiCA license application in Greece, exemplifying the EBA’s tightening grip over non-compliant operators.