MiCA & the Background of European Crypto Regulation

The new regulations of the European Commission on the trading and ownership of cryptocurrencies in the European Economic Area are a textbook example of how our so-called “democratic systems” function. In no other industry are these mechanisms as obvious as in finance. But what exactly happened?

On July 1, 2026, the new regulatory doors in the European crypto world finally slammed shut. With the full entry into force of the MiCA regulation, millions of European crypto users lost access to international platforms where they had previously been able to trade their crypto assets without identity verification. Non-KYC platforms (Know Your Customer) such as CoinEx, Bybit, KuCoin, Gate.io, and Bitget had to completely shut down their services for EU citizens just days ago. Only around 200 of the more than 3,000 crypto firms worldwide have so far received a MiCA license and are therefore still permitted to operate in the European market. Anyone who wants such a license must ensure complete oversight by state regulatory authorities.

What is MiCA?

MiCA (Markets in Crypto-Assets Regulation) is a regulation for the Europe-wide regulation of the crypto market, developed by the EU Commission between 2020 and 2023. It has been fully in force since July 2026. In addition to MiCA, two further regulatory frameworks are entering into force, which together form the actual surveillance architecture in Europe.

The Travel Rule stipulates that every crypto transaction via a licensed CASP must be accompanied by complete identity data from the sender and recipient — i.e., name, address, and account number. Exactly like a bank transfer. CASP stands for “Crypto-Asset Service Provider” and is a regulatory term from the MiCA regulation. This now covers every company that commercially provides crypto services to EU customers — exchanges, wallet providers, brokers, market makers, etc. Anyone wishing to operate as a CASP in the EU has needed an official MiCA license since July 1, 2026, and must register with ESMA (European Securities and Markets Authority).

From 2026, all licensed crypto service providers are required to automatically report their customers’ transaction data to national tax authorities, under the DAC8/CARF framework. This data is then exchanged between all EU member states. From 2027, a further 52 countries worldwide will follow. The tax authority receives name, address, tax identification number, and every single transaction automatically by law — without users being aware of it.

The Real Background

If one believes the official narratives from politics and media, the European regulations are intervening in the “Wild West of the crypto market.” MiCA and the parallel AMLR package (Anti-Money-Laundering Regulation) are supposed to increase consumer protection and combat criminal activities such as money laundering. The lawless space of the crypto world, allegedly full of criminals, terrorists, and tax evaders, is to be regulated dry in the name of honest citizens by the large, centralized political institutions and placed in legally secure hands.

And although most citizens believe this official narrative, it is at least misleading. In reality, these regulations are a successful example of corporatism between centralized regulatory authorities and the financial lobby. It is a joint alliance to secure state sovereignty over the monetary system and the monopoly positions of the banks. This is one of the most important aspects of the existing power structures in our world.

Banking Lobby

In 2024, the organization Finanzwende documented how the most powerful financial lobbyists joined forces in 2022 to work together in Brussels against the unregulated crypto market. With a combined budget of 43 million euros and 610 full-time lobbyists in Brussels, the desired package was implemented shortly thereafter. This was ultimately about their own existential struggle and the preservation of the status quo. For the predominantly anonymous and decentralized crypto market represents a long-term structural threat to the centralized Western financial system.

MiCA immediately creates a regulated market to which banks, as licensed CASPs, now have access themselves. At the same time, decentralized, bank-independent competitors (unlicensed exchanges) are being pushed out of the EU market. Banks win on both sides — they have less competition on one hand and can open up a new business field on the other. MiCA contains extensive capital requirements, compliance obligations, and licensing hurdles. These are simply impossible to fulfill for a small decentralized provider, but no problem for a large bank with a compliance department.

Privacy

Another essential thorn in the side of power and capital is the fact that investors in the crypto market were able to generate profits through personal responsibility and self-borne risk, without the state being able to monitor or tax these financial assets. Hence DAC8/CARF and complete access by the tax authority. No European citizen should be able to transfer or hold money without the all-seeing eye of the state. The fact that this renewed expansion of an all-powerful digital surveillance apparatus violates fundamental rights and restricts every citizen’s freedoms is of no concern to the European Commission and the major banks. The former EU parliamentarian from the Pirate Party, Patrick Breyer, wrote on his website that a general ban on anonymous payments would have at best minimal impact on crime, while increasing dependence on banks and expanding state power.

Where Does Morality Stand?

The tone in our society’s leading media is unsurprisingly clear on this matter. According to them, cryptocurrencies are used only for money laundering, financing weapons, and distributing child pornography. If we want to get to the bottom of these accusations, a look in the mirror helps.

For although there certainly have been and continue to be cases of money laundering and other criminal activities conducted with cryptocurrencies, a decentralized market cannot remotely approach the scale of systematic criminality that emanates from the Western banking and state system. The evidence for this is overwhelming and far exceeds any enumeration.

Deutsche Bank, for example, handled a so-called “mirror trading” system through its Moscow and London branches between 2010 and 2014, with an estimated damage of up to 80 billion dollars. The fine for Deutsche Bank was a fraction of the processed sums at 630 million dollars. No manager was convicted and the bank continues to do business.

The Danish major bank Danske handled an estimated 200 billion euros in suspicious transactions through its Estonian branch between 2007 and 2015. The internal compliance department knew about it. Management knew about it. Nothing was done for years.

The Cum-Ex scandal exposed a worldwide network of lawyers, bankers, and stock traders who had capital gains taxes refunded that they had never paid. Estimated damages amounted to up to 150 billion euros in Europe alone, at least 36 billion in Germany.

In 2008, the German state rescued the financial sector with a total package of 500 billion euros. By the end of 2017, the bank rescue had cost taxpayers 59 billion euros. No leading banker was criminally prosecuted.

Since 2022, massive sums have been flowing to Ukraine, more than 34 billion euros from Germany alone by mid-2024. Funds for state arms contracts are being embezzled. Operation Midas uncovered how 100 million dollars were siphoned from the state energy sector.

And these are only the publicly known cases, which presumably represent only the tip of the iceberg. These examples alone already show that money laundering in the billions occurs not despite, but because of a highly regulated, licensed, and state-secured system. For money laundering on an institutional scale — i.e., in the billions — requires power above all else. Access to correspondent banks, shell companies, and political networks is indispensable for this. This infrastructure is neither decentralized nor anonymous. Regulation and control can only be selectively deployed in a centrally controlled system to protect powerful actors and control small ones.

Another common argument against the unregulated, decentralized crypto market is the accusation of child trafficking and child pornography. However, now that the Epstein scandal is publicly researchable, this argument is stripped of all foundation.

JP Morgan Chase Bank managed Epstein’s accounts from 1998 to 2013 — seven years after his first conviction. Suspicious transactions totaling over one billion dollars were only reported by JPMorgan Chase after Epstein’s death and the publication of the scandal. It later emerged that senior JPMorgan executives had actively facilitated Epstein’s operations. To this day, not a single manager has been indicted.

Deutsche Bank also opened more than 40 accounts for Epstein and processed millions in suspicious transactions. Again, no charges.

A US Congressional inquiry identified suspicious transactions totaling 1.5 billion dollars at several banks in connection with Epstein’s child trafficking. The published Epstein documents feature the names of Bill Clinton, Prince Andrew, Donald Trump, Alan Dershowitz, and many other powerful men. Not one of these men has been or is being criminally prosecuted. Epstein died in a maximum-security cell under questionable circumstances, after his contact list had become relevant shortly before the exposure of further networks.

To what extent can the crypto market compete with the international financial system given this abundance of immoral behavior?

According to a 2024 study by Chainalysis, the proportion of illegal transactions in total crypto volume is below one percent. According to UN estimates, the global financial system thus launders 10 to 25 times more money than the entire crypto market — both in absolute terms and proportionally. The regulated, licensed, and state-supervised institutions thus launder between 800 billion and two trillion dollars per year. The crypto market accounts for a fraction of that.

The moral legitimacy with which the EU Commission and the global banking system parade in connection with these new regulations is therefore not only completely hypocritical but turns the facts upside down.

Summary

MiCA is not consumer protection. MiCA protects the status quo and the financial lobby. It is the establishment of a seamless financial surveillance infrastructure, legitimized by false criminal narratives.

The banking lobby has succeeded with the new Markets in Crypto-Assets Regulation (MiCA) in striking a sweeping blow against all decentralized open-source projects and bank-independent crypto platforms in the European Economic Area. An industry is thus once again shaping its own regulations to secure its own dominance. This is made possible by the centralized and regulatory architecture of the state financial monopoly. Thus the EU Commission has in recent years lent at least an open ear to all financial lobbyists, major banks, and established financial market players, thereby once again proving itself worthy of the accusation of being a biased authority.

The same circle of people who are known for billion-dollar cases of money laundering and were involved in international child trafficking now sits at the tables in Brussels advising the EU Commission on the regulation of the crypto market. This is not an accident. These are the existing so-called democratic systems in action. This is the protection of existing power structures through corporatism, lobbying, centralization, and propaganda.

What court rulings, fines, and parliamentary hearings document is once again largely ignored by the established media. The regulatory framework that automatically reports every Bitcoin purchase by a German saver to the tax authority was created by a system that has demonstrably processed hundreds of billions of euros in criminal money without ever being seriously held accountable.

Moreover, with these new regulations it is becoming increasingly difficult for critics of state power to be heard at all. WikiLeaks had its fundraising cut off by credit card companies and PayPal. With the new regulations over the crypto market, financial control will increasingly be used as a political tool. MiCA and DAC8 now create the infrastructure to apply this principle to every EU citizen who finances or enables dissent.

Those who have understood the dynamics behind the new crypto regulations and still want to continue working with cryptocurrencies now have two options: either submit to the immoral and surveilled ecosystem — or remain true to their own values and fight for financial freedom. For despite these renewed state interventions into the financial freedom of all European citizens, the nature of blockchain-based, decentralized systems remains exactly the same: they cannot be regulated. With Non-KYC platforms such as Haveno or Bisq and private cryptocurrencies such as Monero, financial management without state surveillance is still possible. Find out how this works in practice in our guide.