The European Union’s newly enforced Markets in Crypto-Assets (MiCA) regulation is already reshaping the continent’s digital asset landscape—prompting some firms to exit, consolidate, or shift operations to more favorable jurisdictions, according to a new report by blockchain analytics firm TRM Labs.
MiCA officially came into effect on December 31, 2024, introducing a single, harmonized framework for regulating crypto asset service providers (CASPs) across all 27 EU member states. While the regulation aims to replace the previously fragmented approach with a unified rulebook, the transition has proven too steep for some players in the industry.
“MiCA aims to replace this patchwork with a single, harmonized rulebook. All CASPs seeking to operate in the EU must now go through a standardized authorization process — raising the bar for compliance and clarity,” TRM Labs stated in a blog post.
Compliance Pressure Forces Market Recalibration
According to data from the European Securities and Markets Authority (ESMA), only 17 crypto businesses had received MiCA authorization across seven EU countries as of April 15. An additional 15 entities have been flagged as non-compliant, all reported by Italy’s securities regulator.
This is a dramatic contrast to the 3,000+ crypto firms that were previously registered throughout the EU under national regimes. However, TRM Labs estimates that only 1,100 to 1,300 of those were actively operating.
Now, under MiCA, these firms must undergo a formal and standardized approval process to remain in the market. While some companies may qualify for “grandfathering” provisions depending on local rules, many are reportedly reassessing their presence in the EU altogether.
Consolidation, Migration, and Market Exit
TRM Labs analysts suggest that mergers, relocations, and closures are likely outcomes for firms struggling to meet MiCA’s new compliance requirements. Companies that lack the resources or infrastructure to manage the regulatory burden are either shutting down or seeking mergers to scale their compliance capabilities.
The analysts also noted early signs of a more concentrated and regulated crypto market emerging within the EU, as stricter oversight pushes out smaller or less compliant operators.
“The first quarter of 2025 already shows signs of a smaller, more regulated market taking shape,” the report noted.
Future Regulatory Hubs Remain Unclear
While it’s still too early to predict which EU countries will become hubs for MiCA-compliant crypto activity, some jurisdictions are showing more agility than others. Countries with clearer licensing pathways and favorable regulatory environments may become hotspots for consolidation in the coming quarters.
Notably, some firms like Ethena Labs have already exited countries like Germany, opting to abandon their MiCA license applications altogether—further highlighting the regulation’s disruptive impact.
Outlook
As MiCA’s full implementation unfolds, the European crypto industry is bracing for a period of adjustment and consolidation. While the new framework promises increased investor protection and market transparency, it also presents significant hurdles for smaller players.
The outcome may ultimately be a leaner, more mature digital asset ecosystem but not without casualties along the way.
