EBA Proposes MiCA Fines of Up to 12.5% of Revenue for Major Crypto Issuers
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The European Banking Authority has published a proposed penalty framework that would impose fines of up to 12.5% of annual revenue on major crypto-asset issuers that violate the Markets in Crypto-Assets regulation, or MiCA.
Cointelegraph reported on June 28 that the EBA on June 26 issued a consultation paper setting out how fines would be calculated for “significant” crypto-asset issuers that breach MiCA.
The proposal uses a two-step method to calculate penalties. It first assesses the severity of a violation and then applies aggravating or mitigating factors.
MiCA is the world’s first comprehensive regulatory framework for crypto assets. It requires issuers and service providers to meet bank-level standards for compliance, consumer protection and capital requirements.
Under the proposal, issuers of significant asset-referenced tokens, or ARTs, could face fines of up to 12.5% of annual revenue. Issuers of significant electronic money tokens, or EMTs, could be fined up to 10% of annual revenue. Regulators could also impose penalties of as much as twice the profit gained from a violation.
The proposal was released ahead of MiCA’s licensing requirement taking effect on July 1. From that date, companies seeking to provide crypto-asset services or issue stablecoins in the European Union’s 27 member states must obtain formal authorization from national regulators.
Companies that fail to secure a license may have to stop operating in the EU. They could also face sanctions for MiCA violations, including operating without authorization.
Binance recently announced that it would stop accepting new EU users and restrict some services starting July 1 after withdrawing its MiCA license application in Greece. The exchange recorded net outflows of billions of dollars over three days following the announcement.
The EBA will collect industry feedback through Sept. 28 before finalizing the penalty standards.
