EU banking watchdog proposes MiCA penalty framework for significant crypto token issuers
The Facts
- The European Banking Authority published a consultation paper on June 26 proposing a penalty framework under the EU’s Markets in Crypto-Assets regulation for issuers of significant crypto tokens.
- The proposed framework uses a two-step method to calculate penalties, first assessing the seriousness of an infringement and then adjusting the amount for aggravating or mitigating circumstances.
- Under the proposal, penalties could reach up to 12.5% of annual turnover for issuers of significant asset-referenced tokens.
- Under the proposal, penalties could reach up to 10% of annual turnover for issuers of significant e-money tokens.
- The proposal also allows for fines of up to twice the profits earned from a violation, where applicable.
- The framework applies to issuers of tokens the EBA classifies as “significant,” meaning the proposal is aimed at a subset of crypto issuers rather than the entire market.
- The proposal comes as MiCA’s transitional period ends on July 1, when crypto firms in the EU face full enforcement of the bloc’s licensing and compliance regime.
- Because the EBA document is a consultation paper seeking feedback, the penalty framework is proposed rather than final.
Context
What is the EBA proposing?
The EBA is proposing a standard method for setting penalties when issuers of significant crypto tokens break MiCA rules. Its draft approach starts by judging how serious the breach is and then adjusts the penalty based on aggravating or mitigating factors Cointelegraph,crypto.news.
How large could the fines be?
The draft says fines could reach up to 12.5% of annual turnover for significant asset-referenced token issuers and up to 10% for significant e-money token issuers. In some cases, the penalty could instead be set at up to twice the profits made from the violation Cryptonomist,crypto.news.
Why is this happening now?
The proposal arrives as the EU’s MiCA transition period ends on July 1, moving the bloc into fuller enforcement of its crypto rules. That timing matters because firms that relied on earlier national registrations are reaching the end of their temporary operating window CoinDesk,crypto.news.
Where Left and Right agree, and where they split
- Where Left and Right agree
- Steep, turnover- or profit-based penalties for significant token issuers would make MiCA enforcement materially consequential just as the EU’s transition period ends.
- Where Left and Right split
- Whether the story is about making compliance a real public obligation for major crypto issuers, or about governments wielding severe penalties before standards are fully settled.
How left and right read it
What stands out here is the EU moving toward real consequences for a part of crypto that is large enough to be deemed significant, just as full enforcement begins. A framework that scales penalties to the seriousness of a violation and can reach a share of annual turnover or twice the profits matters because it treats compliance as a public obligation, not a cost of doing business.
What matters here is that the EU is moving from a transition period into full enforcement while the penalty framework itself is still only a consultation paper. For firms deemed significant, that means potentially severe exposure tied to annual turnover or profits, but with the rules not yet final—a reminder that clear, settled standards matter when governments are asserting this much power over a targeted slice of the market.
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