Crypto▲ Bullish
MiCA Compliance Costs Could Push Crypto Firms Into Mergers
New EU crypto rules raise compliance costs, pushing firms toward mergers with banks. UK likely to follow. Sygnum CEO sees opportunity for banks.
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Europe's new Markets in Crypto Assets regulation went into effect July 1. The compliance costs that come with the rules are likely to push crypto firms into mergers with each other and with established financial institutions, according to a CoinDesk report Sunday.
The same trend could extend to Britain, where the Financial Conduct Authority's proposed crypto framework would integrate digital asset companies into the same regulatory standards that cover traditional investment firms. Steven Lightstone, a partner at Morgan Lewis' London office and co-leader of the firm's global FinTech industry team, said the FCA is trying to help competition and newcomers. But he added that the agency has very high standards, particularly where consumers are involved.
Lightstone said the UK's approach differs from MiCA because it uses existing rules rather than a standalone framework. "A crypto firm will be treated like any normal traditional financial institution," he said. "It will still be hard to get FCA authorization."