MiCA aims to standardize crypto oversight across the EU. Some firms may exploit regulatory gaps before full enforcement begins on July 1, 2026.
According to the report, these firms might register in EU countries with less stringent regulations and then use “passporting” rights to operate across the bloc, potentially leading to opaque governance and complex fund flows.
What Is “Jurisdiction Shopping”?
“Jurisdiction shopping” refers to the practice of companies selecting a country with more lenient regulatory standards to establish their operations. Once licensed in that country, they can extend their services throughout the EU using MiCA’s passporting mechanism. This approach can undermine the uniformity MiCA seeks to achieve and may expose consumers to increased risks.
Before MiCA’s full implementation, some crypto firms submitted applications for registration in multiple EU countries within a short timeframe. They withdrew from jurisdictions where their applications faced challenges and proceeded to operate in countries where they encountered less regulatory scrutiny. This strategy allowed them to bypass more rigorous oversight and continue their operations with minimal interference.
The European Banking Authority (EBA) has issued a warning that during the MiCA transitional period, some crypto service providers approved before the regulation takes full effect may exploit regulatory loopholes or engage in “jurisdiction shopping.” The EBA noted that such firms…
— Wu Blockchain (@WuBlockchain) October 12, 2025
During this transitional period, investors must exercise caution. Engaging with crypto service providers that are not yet fully authorized under MiCA may expose you to higher risks. These risks can include potential fraud or mismanagement. The EBA advises consumers to verify whether a crypto service provider is authorized in the EU and to be aware that protections under MiCA may not apply until full authorization is granted.
Steps to Protect Yourself
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Verify Authorization: Ensure that the crypto service provider is listed on the official EU register.
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Understand the Risks: Be aware that services from providers operating under the transitional period may not offer the same level of protection as fully authorized entities.
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Stay Informed: Keep abreast of updates from the EBA and other regulatory bodies regarding MiCA’s implementation.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies presented are the thoughts and opinions of the writer/reviewers, and their risk tolerance may differ from yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments; therefore, please conduct your due diligence. Copyright Altcoin Buzz Pte Ltd.
The post EBA Flags Crypto Risks During MiCA Transition appeared first on Altcoin Buzz.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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