EBA proposes up to 12.5% revenue fines for MiCA violations

The European Banking Authority has unveiled a proposed penalty framework that can impose fines of up to 12.5% of annual revenue on non-compliant issuers of significant tokens under the EU's MiCA regulation.

The EBA published its consultation paper on June 26. The paper establishes a standardized two-step process for determining fines, first assessing the baseline severity of an infraction and then factoring in aggravating or mitigating behavior. The Paris-based watchdog targets issuers of what it considers significant tokens with potentially multimillion-euro penalties.

The framework sharpens enforcement of the Markets in Crypto-Assets regulation. MiCA is described as the world's first comprehensive regulatory regime for digital assets. It requires token issuers and crypto service providers to maintain bank-like compliance, consumer protections and capital reserves to access the single European market.

Penalties reach statutory ceilings of 12.5% of annual turnover. This cap applies to issuers of significant asset-referenced tokens. For significant e-money tokens the ceiling is 10%, or alternatively two times the profits generated by the violation. The EBA's consultation paper states these caps are designed to deter even the largest global digital-asset operators.

The penalty rollout coincides with a July 1 licensing deadline. By next month cryptocurrency firms must secure formal licenses from national regulators to legally offer services or market stablecoins in the 27-nation bloc. The transitional grace period that allowed operation under looser local rules ends then.

Firms failing to obtain regulatory passports by July 1 risk having to halt operations or face infractions such as unauthorized public disclosures or organizational failures. The EBA framework is built to penalize exactly those violations. Binance last week notified EU users of service restrictions after withdrawing its MiCA license application in Greece and failing to secure authorization from any member state before the deadline.

Binance restrictions begin July 1. The exchange will stop onboarding new EU users and limit certain services for EU-based accounts. Users can still withdraw assets, according to notices shared on social media that state all digital assets remain available for withdrawal in line with regulatory requirements. The exchange recorded $1.96 billion in daily net outflows on Wednesday after its announcement, followed by $2.52 billion and $1.46 billion over the next two days according to DefiLlama data.