The head of Gate Europe noted that the new requirements of the Markets in Crypto-Assets (MiCA) regulation, which have come into effect in the European Union, may prove too burdensome for many cryptocurrency companies. According to his statement, the costs of implementing and maintaining MiCA compliance significantly exceed market participants’ expectations, which could lead to a mass exodus of small and medium-sized players from the region.

MiCA, designed to standardize the regulation of crypto-assets in the EU, requires companies to make substantial investments in legal expertise, cybersecurity, and internal control procedures. Industry analysts estimate that, just to prepare for full compliance with the new regulations, the average company could spend between 1.5 and 3 million euros in the first year. For large platforms, these costs could be even higher.

In an interview, the CEO of Gate Europe emphasized: “Many firms will not be able to withstand such high costs, especially amid intensifying competition and falling margins.” He added that, as a result, the EU risks losing part of its innovation infrastructure and jobs unless measures are taken to streamline regulatory requirements for small and medium-sized businesses.

Experts believe that a wave of consolidation is expected in the market in the coming months, and some companies will be forced to either leave the European market or seek partnerships to jointly comply with MiCA standards.