- European Union member states are enacting new laws to facilitate crypto regulation within the region.
- Lithuania plans to tighten crypto regulations and Poland is giving companies more time.
- The Czech Republic has the highest number of registered virtual currency entities among EU countries.
The European Union's crypto sector is undergoing a makeover.
Countries in the 27-nation bloc are gearing up for a new Markets in Cryptocurrency Regulation (MiCA) that will change the rules of the industry forever.
In February, Poland became the latest country to introduce a law that starts a new system for 1,187 companies registered in the country.
migration begins
The overhaul marks the start of a transition to comply with the region's new rules for virtual asset service providers (VASPs) by the end of 2024.
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“This law fills in all the details necessary for MiCA to function in Poland and for crypto asset service providers to comply,” said Jarosław Nowacki, partner and founder of the law firm tau.legal he said DL News.
According to data collected by , the Czech Republic, Poland, and Lithuania have the most crypto entities registered with local financial authorities. DL News.
Cheap, fast and easy registration has made it possible for many businesses to set up shop in these countries, even those that do not have a physical presence in these countries.
But MiCA could put an end to this party, as landmark regulations set stricter standards for companies offering crypto products.
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On the plus side, companies will be able to access the entire EU market with a license from a single member state.
Czech VASP
According to figures last updated in May 2023, the Czech Republic ranks first with 9,372 individuals and companies registered.
Czech authorities did not respond DL News” Repeated requests for updated data. There is no online registration.
Both the Czech Republic and Poland allow individuals to register as VASPs.
“Given that the existing anti-money laundering regime is fairly light, they have quite a bit of work to do.”
— Neil Samtani, VASPnet CEO
While Poland is moving forward with MiCA implementation, the Czech Republic's roadmap is less concrete.
Neil Samtani, CEO of VASPnet, a company that analyzes VASP data, said: “There is a lot of work ahead in the Czech Republic as they have to process a large number of existing registrants, but so far MiCA “Very little progress has been reported.” DL News.
capital requirements
Lithuania ranked third with 569 organizations registered.
“Unlike in Poland and the Czech Republic, most of the registrants are companies rather than natural persons, probably because the minimum share capital requirement is 125,000 euros,” Samtani said.
In December, authorities in Lithuania announced that they would strengthen national laws regarding cryptocurrencies by publishing a draft bill that would supersede MiCA.
“They have a significant amount of work to do given the existing circumstances.” [anti-money laundering] The scheme is fairly light-touch and requires only a notification process,” Samtani said.
price tag
One of the ways these countries have been able to attract more cryptocurrency entity registrations is by offering cheap and efficient sign-up.
In the Czech Republic, notification to regulators costs around 40 euros, compared to Italy, where companies can expect to pay 8,300 euros to register.
In Poland, the new draft law suggests that it will cost a minimum of 4,500 euros for a crypto venture to obtain a license under MiCA, Nowacki said.
Currently, registering as a VASP in Poland takes just two weeks and costs less than 150 euros.
new system
France is one of the top five countries in the European Union in the development of cryptocurrency markets. There are 103 registered VASPs listed in France.
The country also leads the EU in implementing MiCA. In July, the country established a MiCA-like system for new market entrants.
Still, the industry has a long way to go and the clock is ticking.
SG Forge, the digital assets arm of Société Générale, is the only company authorized under France's stricter MiCA-like regime.
In Italy, on the other hand, 129 entities are registered.
“Italy is currently holding a public consultation on the introduction of MiCA, which shows that Italy has done most of the work and we are not likely to see any major changes to the proposed regime.” said Samtani.
Transitional period
Under MiCA, European countries can choose to extend the deadline by which already registered companies must comply with the new law by up to 18 months.
However, the European Securities and Markets Authority, which oversees parts of MiCA's implementation, warned that it should not take longer than 12 months.
Lithuania has decided to abolish the transition period and make the MiCA law come into force on December 30th. Italy also recently announced a 10-month transition period.
Mr Nowacki said Poland would give registered companies an additional year of grace.
“After the end of 2025, this current registry will no longer exist,” he told DL News. “Until then, businesses can operate based on the registrations they currently have.”
But Nowacki said Poland's registry could shrink by the 2025 deadline.
If a VASP fails to submit quarterly data reports to Poland's financial intelligence department, or if a company fails to respond to an audit request from the regulator, it may be removed from the CASP register.
Inver Press is DL News” Brussels correspondent. The author can be contacted at: [email protected]. Ana Curić is a data journalist. To contact her, [email protected].
