Crypto Platforms in Europe: Rules, Risks, and How They Work Under MiCA

Mila Mostovaya

Crypto Regulations MiCA
Crypto Platforms in Europe: Rules, Risks, and How They Work Under MiCA

The Markets in Crypto-Assets (MiCA) regulation has been in effect since 30 June 2024 in the European Union. Recently, we wrote in more detail about this — you can read the articles here and here. However, MiCA regulations cover only Crypto-Asset Service Providers (CASPs), including centralized exchanges (CEX) and other centralized crypto services. In this case, how do decentralized exchanges (DEXs) work in Europe? Let us look at some well-known services.

What Kind of Assets Does MiCA Not Affect?

MiCA does not apply to:

  • Fully decentralized protocols, exchanges, and DeFi applications
  • Private peer-to-peer (P2P) transactions
  • Centralized exchanges outside the EU
  • Self-custody wallets and applications

Centralized exchanges outside the EU

These are perhaps some of the most difficult cases in regulation, because centralized exchanges outside the EU are not covered by MiCA directly. If a centralized exchange wants to operate legally in EU territory, launch marketing campaigns, and actively solicit clients or advertise its services in the EU, it must obtain a MiCA license. However, if the client approaches on their own initiative, authorization is not required.

For example, Binance does not have a MiCA license but works closely with EU authorities. According to the Law Enforcement Review System, the exchange will disclose data as required by law and, in each case, upon request by law enforcement agencies. This is possible when you make a transaction of more than 1,000 euros.

Moreover, Binance has limited stablecoin transactions in Europe, which means that you cannot sell or convert coins to USDT inside the exchange. In other words, it is literally dead weight. Kraken has confirmed the delisting of USDT, EURT, TUSD, and other stablecoins for European users as well.

Kraken and OKX have obtained official European CASP licenses (Kraken in Ireland, OKX through OKCoin Europe in Malta) and operate legally in all EU countries.

As of mid-2025, KuCoin has not yet received a license and has only applied for a MiCA license in Austria.

In conclusion, we would say that most non-European centralized exchanges have been moving to obtain a MiCA license and to operate as “clear” services.

Decentralized Exchanges (DEXs) and DeFi Protocols

Where crypto-asset services are provided in a fully decentralized manner without any intermediary, they do not fall within the scope of MiCA regulation. This means that services such as Uniswap (Ethereum DEX), PancakeSwap (Binance Smart Chain), SushiSwap, Balancer, and Curve can operate freely in the EU.

However, the MiCA committee is planning to introduce some limits and specific regulations. For example, new AML (Anti-Money Laundering) rules are likely to prohibit anonymous crypto accounts and fully confidential cryptocurrencies (privacy coins such as Monero and Zcash) on regulated platforms.

DeFi protocols do not collect personal client information or store users’ assets; they do not have data to share with regulators. Therefore, DeFi exchanges do not have to report transaction information to authorities and tax services.

For example, Uniswap Labs states directly that it does not transmit information to the U.S. tax authorities. The same approach applies in the EU.

However, the lack of direct control does not mean total safety from “Big Brother.” Many Reddit users note “a false sense of anonymity,” because in fact all transactions on a blockchain are public, and EU tax authorities can analyze the blockchain and match “anonymous” wallets with real people — especially when it concerns a large amount of assets.

Self-Custody Wallets

The MiCA regulation states that “hardware or software providers of non-custodial wallets should not fall within the scope of this regulation” (Recital 83). This means that we, Coin Wallet, and any hardware wallets can operate in the EU without limits. This is good news, is it not?

However, restrictions on anonymous transactions have been introduced as part of Anti-Money Laundering (AML) measures. On December 30, 2024, the Travel Rule came into effect in the European Union, requiring service providers (exchanges, etc.) to collect information about the sender and recipient of cryptocurrency transactions.

  • If the amount withdrawn from an exchange to a personal wallet or deposited from a personal wallet to a centralized exchange exceeds €1,000, the platform is required to verify the identity of the wallet owner — even if it is self-custodial. In other words, when withdrawing large sums to your self-custody address, you will most likely be asked to prove that it is indeed your address.

    Already, users in the EU are facing the fact that when attempting to withdraw funds to a cold wallet, they are required to provide the exchange with information about the wallet and undergo additional checks.

  • Regulators require not only verification but also reporting of large transfers to supervisory authorities. The new rules stipulate that every transaction over €1,000 must be reported to the relevant authorities. This means that if you withdraw a significant amount to your hardware wallet, the exchange will notify the financial authorities (for the purposes of combating money laundering and tax evasion). The industry sees this as a de facto ban on anonymous large transactions — in other words, it is becoming more difficult to maintain complete confidentiality of fund movements.

If you transfer cryptocurrency between two of your personal addresses, there are no restrictions. However, when interacting with centralized platforms, the new requirements must be taken into account.

The Bottom Line

We recommend using a rational strategy if you are an EU resident. For example, for daily trading, centralized exchanges might be a good choice; DeFi protocols are probably suitable for profit experiments, and self-custodial or hardware wallets can be good tools for reliably storing your assets.

Coin Wallet is a self-custodial multi-cryptocurrency wallet where private keys are stored only by you. It does not require registration or KYC, does not track your actions, supports Tor and VPN for anonymity, and works on the web, App Store, and Google Play. It supports Bitcoin, Ethereum, Monero, Solana, Cardano, and dozens of other tokens.

A simple interface and full control over your assets make Coin Wallet a convenient and secure solution for storing and using cryptocurrencies. Today, millions of people around the world trust us: over 24 million wallets have been created across 190 countries.