PROPORTIONALITY OF CRYPTO-ASSET MARKET REGULATION, COMPLIANCE COSTS, AND ENTRY BARRIERS FOR SMES UNDER MICA IMPLEMENTATION
Abstract
The article examines the proportionality of crypto-asset market regulation under the implementation of the European MiCA Regulation (EU 2023/1114) through the prism of compliance costs and entry barriers for small and medium-sized enterprises. Unlike most studies that focus mainly on the macroeconomic or legal effects of MiCA, this paper concentrates on the micro level, namely the structure, scale, and consequences of the costs borne by Crypto-Asset Service Providers in order to obtain a license and maintain operations under the new regulatory requirements. Based on analytical reports by KPMG, ESMA, ЕВА and national regulators of EU countries, the study provides a quantitative assessment of one-time and recurring compliance costs. It demonstrates that the most burdensome components include minimum capital requirements, implementation of DORA-compliant cybersecurity systems, whitepaper preparation, and the obligation to ensure local operational presence in the licensing jurisdiction. The findings show that such regulatory pressure has a disproportionate impact on SMEs, increases entry barriers, pushes smaller market participants out of the market, and contributes to market concentration in favor of large traditional financial institutions. Using the example of regulatory arbitrage during the MiCA transitional period, particularly the "grandfathering clause" in Lithuania and Poland, the article shows that both excessively rigid and overly delayed adaptation may deepen structural imbalances. Such pressures can trigger a "de-shadowing paradox," inadvertently pushing innovators toward unregulated decentralized platforms. The study substantiates that reducing entry barriers without undermining financial security requires the practical application of the principle of regulatory proportionality, in particular through regulatory sandboxes, differentiated capital requirements depending on the scale of activity, and the implementation of RegTech solutions using NLP algorithms for automating AML/KYC procedures. For Ukraine, adaptation via MiCA harmonization is proposed.
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Copyright (c) 2026 Ірина Краснова, Олексій Литвиненко, Ілля Литвиненко, Сергій Ходакевич
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