Europe’s crypto rulebook sets stage for dealmaking

Europe’s tougher digital-asset rules are creating conditions for a new wave of mergers and acquisitions as crypto companies seek licences, compliance expertise, customers and stronger links with established banks.

The European Union’s Markets in Crypto-Assets regulation, known as MiCA, entered a decisive phase on July 1, when the final transitional arrangements expired across the bloc. Crypto exchanges, custodians and other service providers can no longer rely on older national registrations and must hold authorisation as crypto-asset service providers to continue serving EU customers.

The shift is dividing the market between well-capitalised groups able to meet the regulatory threshold and smaller operators facing expensive technology, governance and staffing requirements. That gap is expected to encourage acquisitions of licensed companies, partnerships with regulated financial institutions and sales by businesses unable to fund compliance independently.

MiCA introduces common standards covering capital, customer-asset protection, governance, disclosures, complaint handling, conflicts of interest and operational resilience. A licence obtained in one member state can be used to serve customers across the European Economic Area, making an authorised platform potentially more valuable to international buyers seeking access to a market of about 450 million people.

Only a fraction of the crypto businesses that previously operated under national systems had obtained MiCA approval by the end of the transition period. Hundreds faced the prospect of suspending services, migrating customers or withdrawing from parts of Europe. Binance, the world’s largest cryptocurrency exchange by trading volume, withdrew a licence application in Greece after delays and said it was pursuing authorisation through another member state.

Kraken, Coinbase, Crypto. com, Bitpanda and other large operators have secured or pursued European approvals, strengthening their competitive position as non-compliant rivals retreat. Licensed firms may now become acquisition targets because buyers can gain regulated infrastructure without starting a lengthy authorisation process from the beginning.

The expense extends beyond legal applications. Companies must maintain compliance teams, cyber-security controls, audited governance systems, reserve-management procedures and transaction-monitoring technology. These fixed costs are difficult for smaller exchanges and wallet providers to absorb when trading volumes are weak or customers are concentrated in only one country.

Consolidation was already gathering pace before the EU deadline. Coinbase agreed to buy crypto options platform Deribit for about $2.9 billion, comprising $700 million in cash and 11 million Coinbase shares. Kraken bought futures trading platform NinjaTrader for $1.5 billion, while Ripple agreed to acquire prime broker Hidden Road for $1.25 billion. The deals demonstrate how major crypto groups are expanding beyond spot trading into derivatives, brokerage, custody and institutional services.

European targets may command a premium when they combine a MiCA licence with payment access, institutional customers or specialised technology. Exchanges could seek custody providers, blockchain analytics companies and compliance software businesses. Banks may favour minority investments, joint ventures or commercial partnerships rather than full takeovers, limiting their exposure while gaining access to digital-asset infrastructure.

Traditional financial groups are also becoming more active. Société Générale has expanded services for crypto companies through its SG-Forge digital-assets arm and has issued euro- and dollar-denominated stablecoins. Portugal’s Bison Bank has obtained approval to operate directly as a crypto-asset service provider, illustrating how banks can enter the sector through their existing compliance and balance-sheet capabilities.

Bank participation could help address one of the industry’s persistent weaknesses: reliable access to deposits, payments and settlement services. Crypto companies have repeatedly faced account closures or limits imposed by lenders concerned about money laundering, sanctions and reputational risks. Partnerships with banks could provide stronger fiat-currency channels while giving lenders fee income from custody, tokenisation and settlement.

The United Kingdom is moving towards a separate but similarly demanding framework. Parliament approved legislation in February bringing a broad range of crypto activities within financial-services regulation. The Financial Conduct Authority published major elements of its final rules in June, with the regime expected to take effect on October 25, 2027.

The UK application window is scheduled to open before implementation, giving firms time to seek authorisation. Companies serving both the EU and Britain will nevertheless have to manage two regulatory systems, raising the cost of maintaining separate reporting, capital and consumer-protection processes.

That divergence could itself support dealmaking. A MiCA-authorised company may acquire a UK-regulated business to secure coverage on both sides of the Channel, while British firms could buy EU licence holders rather than build operations separately. Larger groups may also centralise compliance and technology across several acquired brands.

Regulation does not guarantee successful consolidation. Buyers must examine customer liabilities, token-listing practices, sanctions exposure and the security of assets held in custody. A licence may lose value if regulators discover weak controls after an acquisition, while differences between national supervisors could complicate cross-border integration despite MiCA’s harmonised framework.