EBA proposes heavy fines for major crypto token issuers

On June 26 the European Banking Authority published a consultation paper that would allow fines of up to 12.5% of annual turnover for issuers of significant asset-referenced tokens and up to 10% for issuers of significant e-money tokens. Authorities could instead impose penalties equal to twice the profits from the offending activity. The proposal was published days before the EU’s Markets in Crypto-Assets regulation becomes binding on July 1.

The paper sets a two-step method for calculating penalties: determine the baseline severity of the infringement, then increase or reduce the sanction based on aggravating or mitigating circumstances. The consultation opened on June 26 and runs for three months, closing on September 28, allowing market participants and national authorities to submit comments.

MiCA becomes binding across the EU’s 27 member states on July 1 and requires many crypto firms and token issuers to obtain national authorisation to offer services or market stablecoins. The EBA’s framework applies to entities it deems to issue “significant” tokens and establishes statutory ceilings for national supervisors to apply within the proposed methodology.

Under the proposed ceilings, asset-referenced tokens-stablecoins backed by assets or currencies-face fines up to 12.5% of annual turnover. E-money tokens, which function more like digital cash, face fines up to 10% of turnover. As an alternative to turnover-based caps, supervisors could apply penalties equal to twice the profits from the breach.

The framework lists factors that would raise or lower a penalty, including the scale of harm, whether a breach was repeated, cooperation with supervisors, and remedial steps taken by the issuer. The consultation paper describes how to quantify baseline harm and how to treat systemic or cross-border effects.

Regulated firms must secure national authorisations by July 1 or risk enforcement action or being forced to halt services. One major exchange withdrew its MiCA license application in Greece and notified EU customers it would stop onboarding new users from July 1 while preserving withdrawal access. Market data showed daily net outflows above $1 billion on several days after the notice.

After the consultation period the EBA will finalise the guidance and national regulators will use the methodology when imposing administrative penalties for MiCA breaches.