MiCA Purge: 80% of European Crypto Firms Lost Authorization

TRM Labs also ran risk ratings on both groups. Among the firms that lost authorization, 12% carried a High or Severe risk classification. Among the authorized group, the figure was 2%.

The difference comes down to sanctions exposure. Unauthorized firms sent $5 billion to sanctioned counterparties, TRM Labs found. Authorized firms sent $1.7 billion.

"Half show no measurable illicit exposure, while a small number route 1% to 12% of their volume directly to illicit addresses," the report said. "As a result, exposure is roughly four times higher for offboarding firms."

The European Securities and Markets Authority has directed unauthorized crypto asset service providers to stop accepting new EU clients.

MiCA has not been without friction. Crypto executives have raised concerns that the regulation cuts European access to large-market-cap stablecoins. The EU is planning a full revision of the framework focused on that issue and on bringing tokenized assets under its scope.