More Than 1,700 Platforms, Including Binance, Left Unlicensed: Post-MiCA Fraud Alarm in Europe

With the entry into force of the European Union’s crypto-asset regulation, MiCA, more than 1,700 firms remaining unlicensed has opened a new door for fraudsters.

European Union (EU) financial regulators have issued serious warnings against increasing fraud cases following the Markets in Crypto-Assets Regulation (MiCA), which came into full effect as of July 1. The fact that thousands of platforms unable to comply with the new legal framework had to cease operations has led malicious actors to target investors by impersonating both regulators and crypto firms. This new legal era represented by the EU flag has brought serious security risks with it.

According to data shared by the European Securities and Markets Authority (ESMA), only around 320 entities have managed to obtain a MiCA license so far. In contrast, approximately 1,700 firms are expected to terminate or restrict their EU operations due to being unlicensed. This massive gap has paved the way for fraudsters to run fake campaigns using the ESMA logo and to direct users to fraudulent websites by posing as staff from the French regulator, AMF.

Post-MiCA Security Gap and Regulator Impersonations

The fact that Binance, one of the world’s largest exchanges, has not yet obtained a MiCA license further increases the perception of risk among users. AMF official Stéphane Pontoizeau stated that this transition process offers significantly more opportunities for fraudsters than usual. Although the institution avoids implementing an aggressive shutdown schedule against unlicensed exchanges to prevent investors from losing their assets in a panic, regulators in the Netherlands and other EU countries continue to warn investors to be cautious.

Malicious actors, taking advantage of investors seeking licensed service providers, are demanding asset transfers by posing as legal authorities. Experts emphasize that users with accounts on exchanges that have failed to complete the licensing process should be more skeptical than ever toward incoming emails and messages. While this new regulation brought by MiCA aims to increase security in the long run, this chaos during the transition phase makes investors direct targets.