French authorities announced this week that about 30% of cryptocurrency companies have not yet applied for a MiCA license. This news comes as an important regulatory deadline approaches that could determine whether these companies can continue to operate legally.

The European Union (EU) has become the first jurisdiction to establish a legal framework for cryptocurrencies, but MiCA has faced backlash due to high capital requirements and operating costs.

France's license deadline is approaching

Under the European Union's regulations for the crypto asset market (MiCA), crypto asset companies must obtain approval from national regulators to operate throughout the region.

In France, companies are required to notify the regulators by June 30 whether they aim to obtain a MiCA license or cease operations. However, about one-third of companies have still not clarified their policy.

This week in Paris, Stéphane Pontois, head of the Market Intermediation Department at the French Financial Markets Authority, revealed that regulators notified companies last November about the proximity of the end of the national transition period.

According to Reuters, of the approximately 90 crypto asset companies in France that have not yet received MiCA approval, 30% have already submitted their applications. Meanwhile, 40% have expressed no intention to do so.

The remaining 30% did not respond to the notification from last November and have not informed the authorities of their future plans.

Under MiCA, services can be deployed throughout the EU by obtaining approval from national regulators. If companies miss the deadline, they risk losing their operating rights in France and other EU member states.

Industry pushes back against EU regulations

MiCA will be fully implemented in December 2024, establishing the first comprehensive regulatory framework for crypto assets as a major jurisdiction. This move positions the EU ahead of key competitors like the United States.

While the clarification and harmonization of regulations are appreciated, some industry stakeholders express concerns about the details.

Critics point out that this framework imposes excessive compliance costs and operating expenses, placing an unfair burden on small and medium-sized crypto asset companies. They refer to the potential for market withdrawal or consolidation.

There are also concerns regarding the MiCA regulations on stablecoins. The regulation seeks close integration with traditional banking infrastructure, leading to the view that financial institutions may have an advantage over native crypto asset issuers.

Therefore, reports this week that French crypto asset companies are still unresponsive before the June deadline raise questions about the attractiveness of the business environment within the European Union.

Under such pressure, some companies are increasingly likely to seek expansion outside the EU, where regulations are more flexible.