Gate Europe CEO warns some MiCA-licensed firms may still leave EU over costs

Gate Europe CEO Giovanni Cunti said some crypto firms that have already secured licenses under the EU’s Markets in Crypto-Assets (MiCA) framework may still be unable to sustain the ongoing cost of compliance, in remarks on Cointelegraph’s Chain Reaction podcast published July 21.

“I think there are going to be quite a few more of the ones that acquire MiCA license that will not be capable to sustain the cost and the resources that are needed to carry on this business in the long term,” Cunti said.

MiCA compliance cost continues to rise for licensed crypto firms

The growing MiCA compliance cost extends well beyond the initial licensing process. Crypto companies must continuously invest in governance structures, risk management systems, cybersecurity, anti-money laundering controls, compliance personnel, reporting obligations, and ongoing regulatory oversight.

Industry analysts note that these recurring expenses can become especially burdensome for startups and mid-sized exchanges with limited financial resources.

While larger exchanges possess greater capital reserves to absorb these costs, smaller firms could find themselves operating on increasingly thin margins.

The European Union officially concluded MiCA’s 18-month transition period on July 1, requiring crypto asset service providers serving European customers to either obtain authorization under the framework or discontinue regulated services.

The deadline triggered significant operational adjustments across the industry as firms raced to meet regulatory expectations.

Several exchanges scaled back or withdrew certain services across parts of Europe during the transition, while others accelerated licensing applications. Notably, Binance, the world’s largest cryptocurrency exchange by trading volume, had not secured a MiCA license before the transition deadline.

MiCA compliance cost could push innovation outside Europe

Beyond the financial implications, Cunti believes the rising MiCA compliance cost may unintentionally discourage innovation within the European crypto ecosystem.

According to him, entrepreneurs developing blockchain projects could increasingly choose jurisdictions offering more flexible regulatory environments rather than navigating Europe’s extensive compliance obligations.

“We may need to be prepared that some projects, possibly some important projects, may be looking at other jurisdictions with different guidelines,” Cunti said.

His comments reflect broader concerns across the digital asset sector that while MiCA provides regulatory clarity and stronger consumer protections, it also raises the barriers to entry for emerging businesses.

Industry observers have frequently argued that excessive regulatory costs can slow innovation by diverting resources away from product development toward legal, compliance, and operational requirements.

Investor protection remains MiCA’s biggest strength

Despite criticism surrounding the MiCA compliance cost, many policymakers continue to view the framework as a major milestone for the global cryptocurrency industry.

MiCA establishes standardized rules governing crypto asset service providers throughout the European Union, replacing fragmented national regulations with a unified licensing regime.

The legislation aims to improve market integrity, enhance transparency, reduce fraud, and strengthen consumer confidence in digital assets.

European officials have consistently argued that regulatory certainty could attract institutional investors while fostering long-term industry growth.

European Securities and Markets Authority (ESMA) Chair Verena Ross has repeatedly emphasized that consistent supervision and harmonized regulation are essential to protecting investors and supporting orderly financial markets.

Europe’s crypto industry faces a critical test

Whether the MiCA compliance cost ultimately strengthens or weakens Europe’s position in the global crypto economy remains uncertain.

While the framework offers long-awaited legal certainty, the increasing operational burden may accelerate market consolidation as only well-capitalized firms remain competitive.

The coming months will likely determine whether smaller licensed companies can sustain the ongoing MiCA compliance cost or whether Europe’s crypto market becomes increasingly dominated by larger institutions with deeper financial resources.

For investors, the new regulatory landscape promises stronger safeguards. For crypto businesses, however, the MiCA compliance cost may become the defining factor separating long-term survivors from companies forced to exit one of the world’s most closely watched digital asset markets.