Key facts
- The European Banking Authority (EBA) has proposed a penalty framework for cryptocurrency issuers violating EU digital-asset laws.
- Penalties for non-compliant significant token issuers could reach 12.5% of annual revenue or double the profits from the violation.
- The EU's Markets in Crypto-Assets (MiCA) regulation requires firms to obtain licenses by July 1 to operate within the bloc.
- Binance is restricting services for EU users and halting new user onboarding due to failing to secure MiCA authorization.
- The EBA's move signals a stricter enforcement stance by the EU, contrasting with the US approach.
The European Banking Authority (EBA) has introduced a proposed penalty framework for cryptocurrency issuers that violate the EU's Markets in Crypto-Assets (MiCA) regulation. This framework, detailed in a consultation paper released on June 26, aims to establish standardized penalties for non-compliant issuers of significant tokens. The proposed fines could reach up to 12.5% of annual turnover for significant asset-referenced tokens and 10% for significant e-money tokens, or twice the profits generated by the violation. This move comes as the EU's MiCA regulation, designed to bring comprehensive rules to the digital asset sector, nears its July 1 deadline for firms to obtain national licenses. Binance, the world's largest cryptocurrency exchange, has announced it will restrict key services for EU users and halt new user onboarding effective July 1, after withdrawing its MiCA license application in Greece. The exchange experienced significant net outflows following this announcement. The EU's proactive approach to setting clear penalties contrasts with the United States' regulation-by-enforcement strategy, positioning Europe as a potential global standard-setter for digital finance.