The Markets in Crypto-Assets (MiCA) regulation imposes new requirements on all Virtual Asset Service Providers (VASPs) in the EU. Startups and small businesses are under threat.
Evolution of Crypto Licenses in Estonia
In 2017, Estonia was the first EU country to introduce a crypto licensing process. It was easy and fast: no need for physical presence, share capital, or proof of AML and KYC systems. By 2019, around 2,000 licenses were issued. However, starting in 2019, amendments introduced tougher requirements, reducing the number of licenses to 45 today.
Current Situation with VASP Registration in the EU
Countries with light VASP registration processes, like Poland and the Czech Republic, will see changes due to MiCA's implementation. About 1,600 VASPs are registered in these countries, able to obtain registration within weeks. By 2025, all registered VASPs must comply with new MiCA standards or cease operations.
Challenges for Small Businesses and Startups
Major challenges are costs and resources. MiCA licensing is much more expensive, ranging from 30,000 to 80,000 euros. Companies must meet complex requirements, including AML/KYC systems. In Poland, 1,600 VASPs will need one AML/compliance officer each by July 2025. For small companies, this is nearly impossible.
Under MiCA, many crypto startups and small firms in the EU may face significant challenges to comply with the new standards. Whether they can adapt or must shut down remains uncertain.
