Two of the world’s largest cryptocurrency firms are on the verge of securing licenses to operate across the European Union, as tensions rise among regulators over the pace and stringency of certain countries’ approval processes, according to sources familiar with the matter.

Under the EU’s new Markets in Crypto-Assets (MiCA) regulation, which came into effect earlier this year, member states are authorised to issue licenses that permit crypto firms to operate across the 27-nation bloc.

However, “some have raised concerns in closed-door meetings about the speed with which licenses are being granted,” Reuters reported, citing two people familiar with those discussions who requested anonymity due to the sensitivity of the issue.

At the heart of the matter lies oversight of the multi-trillion-dollar crypto industry, which regulators have long warned could foster fraud, financial instability and illicit flows if left unchecked.

MiCA seeks to bring the sector under a unified regulatory framework akin to traditional finance, but some fear that inconsistent enforcement could undermine its objectives.

Gemini, a cryptocurrency trading platform founded by billionaire twins Tyler and Cameron Winklevoss, is reportedly close to obtaining a license from Malta, the EU’s smallest member state, according to two sources.

This follows earlier approvals issued by Malta to OKX and Crypto.com, just weeks after MiCA’s implementation.

Malta’s rapid approvals have attracted scrutiny from other national regulators who convene under the European Securities and Markets Authority (ESMA).

France’s AMF has publicly cautioned that ESMA’s lack of direct authority could trigger a “regulatory race to the bottom”.

A senior regulatory official, speaking on condition of anonymity, expressed concern about relying on licenses from countries with limited regulatory staff, pointing specifically to Malta.

ESMA has reviewed Malta’s licensing procedures, and a report is expected to circulate shortly, according to one source.

In response, a spokesperson for the Malta Financial Services Authority stated that it had issued four crypto licenses to date and attributed its swift processing to its “in-depth understanding acquired over these years”.

The authority also maintained that its anti-money laundering standards were stringent.

ESMA declined to comment.

OKX said its application process had been “rigorous” and emphasised that compliance remained a top priority.

The regulatory debate has intensified with expectations that Luxembourg will soon grant a license to Coinbase, opens new tab, the first US crypto-focused company to join the S&P 500, one of the people said.

While the application has been in progress for several months, one person pointed to the relatively modest size of Coinbase’s planned operation in Luxembourg.

A Coinbase spokesperson did not comment on its application but said it employed 200 in Europe and that it invested in staff to ensure operations were safe.

The spokesperson said Luxembourg was a “high-bar, well respected global financial centre” and that Coinbase would hire more than 20 people there by the end of the year.

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