Coinbase and Circle Expand European Operations Following French Regulatory Approval

Coinbase and Circle have both expanded their operations in Europe after receiving regulatory approval from France’s Financial Markets Authority (AMF). Coinbase, a cryptocurrency exchange, obtained a Virtual Asset Service Provider (VASP) license from the AMF, aiming to establish itself in European markets beyond the U.S.

The AMF’s license allows Coinbase to operate as a digital asset exchange, offering services such as cryptocurrency trading, crypto-to-fiat trading pairs, and crypto custodial services. This was reported by CNBC on December 21 and confirmed by a spokesperson from the company.

Simultaneously, Circle, the entity behind the USD Coin (USDC), announced its conditional registration with the AMF. Its CEO, Jeremy Allaire, expressed the company’s ambition to secure a full Digital Asset Service Provider (DASP) license from France’s financial regulator.

These expansions precede the European Union’s (EU) upcoming Market in Crypto-Assets (MiCA) legislation, set to be implemented from December 30, 2024, with certain stablecoin regulations becoming effective on June 30 of the same year.

The MiCA will establish a uniform regulatory framework for digital assets within the EU, replacing individual member states’ regulations and enabling MiCA-compliant firms to offer services throughout the EU.

Amid heightened regulatory scrutiny in the United States, Coinbase and Circle are preparing for MiCA compliance. For instance, the U.S. Securities and Exchange Commission (SEC) has taken legal action against Coinbase and its competitor Binance, accusing them of offering unregistered securities.

SEC Chair Gary Gensler has been particularly vigilant regarding crypto assets and service providers, often classifying most tokens as securities and asserting that virtual currencies should be subject to existing financial regulations.

Coinbase, led by CEO Brian Armstrong, challenges the SEC’s stance on the securities status of cryptocurrencies. The company has filed a plea for clear crypto regulations with the SEC, which, according to Coinbase, has been enforcing regulations through litigation.

However, the SEC, under Gensler, rejected Coinbase’s request, referring to the existing laws that already govern U.S. financial markets.

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