Kraken Overtakes Coinbase Under EU MiCA as Europe Prepares for the Next Wave of Crypto Regulation

The European cryptocurrency market has entered a new regulatory era, and the effects are already reshaping the industry's competitive landscape.

Just days after the European Union fully enforced its landmark Markets in Crypto-Assets (MiCA) regulation, Kraken has emerged as the largest MiCA-compliant cryptocurrency exchange in Europe, surpassing Coinbase in both market coverage and available spot liquidity. At the same time, European policymakers are signaling that the regulatory framework is far from complete, with discussions already underway about expanding MiCA to include tokenized securities and non-European stablecoin issuers.

The developments mark one of the most significant turning points for the European crypto industry in recent years. While fully licensed exchanges are gaining market share and investor confidence, several smaller platforms are struggling with the costs and operational demands of compliance.

The changes also demonstrate that Europe's digital asset industry is entering a phase where regulatory compliance is becoming just as important as technology, liquidity, and trading features.

MiCA Officially Takes Effect Across the European Union

On July 1, the European Union officially completed the full implementation of the Markets in Crypto-Assets Regulation, commonly known as MiCA.

Source: Wu Blockchain X

Before MiCA, cryptocurrency companies often faced different licensing requirements depending on which EU country they operated in. The new framework introduces a unified licensing system, allowing approved Crypto-Asset Service Providers (CASPs) to serve customers across the bloc under a single regulatory authorization.

European regulators believe the framework will strengthen investor protection, improve market transparency, reduce financial risks, and create legal certainty for both consumers and businesses.

For crypto exchanges, however, the regulation also introduces stricter operational standards, capital requirements, cybersecurity obligations, custody rules, and reporting procedures.

The immediate impact has already become visible.

Kraken Emerges as Europe's Largest MiCA-Compliant Exchange

According to the latest industry liquidity data, Kraken now leads all MiCA-licensed cryptocurrency exchanges operating in Europe.

The exchange currently holds approximately $399.71 million in spot liquidity, making it the largest regulated trading venue in the region. It also leads the perpetual futures market with approximately $206.90 million in perpetual liquidity, reinforcing its position across both spot and derivatives trading.

Kraken's advantage extends beyond liquidity.

Source: Official Post

Coinbase, one of Kraken's largest competitors, currently supports roughly 1,074 markets, while maintaining around $305.23 million in spot liquidity and $167.39 million in perpetual liquidity.

Crypto.com follows as another major licensed platform, with approximately $130.84 million in spot liquidity.

Other licensed exchanges currently operating under MiCA include Bitstamp, Bybit, OKX, Gate, and Backpack, although their reported liquidity levels remain significantly below those of Kraken and Coinbase.

The latest rankings suggest that regulatory approval alone is no longer enough. Liquidity depth, market diversity, and operational scale are becoming increasingly important as institutional and retail traders seek reliable venues within Europe's regulated crypto market.

MiCA Compliance Is Already Reshaping Competition

One of the most immediate consequences of MiCA's implementation has been the growing gap between fully compliant exchanges and those unable to satisfy the new regulatory standards.

The regulatory transition has proven expensive.

Exchanges must now maintain stronger governance structures, meet strict capital requirements, improve cybersecurity systems, strengthen custody procedures, implement enhanced consumer protections, and comply with extensive reporting obligations.

These requirements have increased operational costs throughout the industry.

Not every platform has been able to adapt.

AscendEX became one of the first notable exchanges to exit the European market following MiCA's full implementation.

The company announced that it had ceased operations for European customers beginning July 1, citing regulatory requirements alongside broader operational and market considerations.

As part of its wind-down process, the platform suspended new account registrations, deposits, spot trading, staking services, lending products, and several other platform functions.

Only limited withdrawal services remain available for existing users.

The closure highlights the financial and operational pressures facing exchanges that lack the resources necessary to satisfy Europe's increasingly demanding regulatory framework.

Industry observers believe additional consolidation may occur over the coming years as compliance costs continue rising.

Brussels Is Already Preparing MiCA's Next Chapter

Although MiCA has only recently become fully enforceable, European policymakers are already discussing possible revisions.

The European Commission has opened a public consultation inviting industry participants, financial institutions, technology companies, regulators, and market experts to provide feedback on areas where the legislation may require expansion.

The consultation period remains open until September 30.

Among the biggest topics under review is whether MiCA should explicitly regulate tokenized financial securities.

When lawmakers originally drafted the regulation, tokenized stocks, bonds, and other traditional financial instruments were largely excluded because they already fell under existing European securities laws.

Since then, however, the tokenization market has expanded rapidly.

Blockchain-based representations of traditional financial assets have experienced significant growth, attracting increasing interest from banks, asset managers, and institutional investors.

As tokenization becomes one of the fastest-growing segments of digital finance, regulators are evaluating whether a dedicated MiCA framework would provide greater clarity for issuers and investors.

Another major topic involves stablecoins issued outside the European Union.

Current MiCA rules establish two categories of regulated stablecoins.

Electronic Money Tokens (EMTs) are designed to maintain a one-to-one value with a single fiat currency, such as the euro.

Source: Xpost

Each category carries different reserve requirements, governance standards, capital obligations, and regulatory oversight.

However, policymakers are now questioning whether additional rules are needed for stablecoin issuers headquartered outside Europe but serving European customers.

The outcome of these discussions could significantly influence the future of cross-border digital asset markets.

ESMA Launches Industry-Wide Custody Review

Alongside the Commission's consultation, the European Securities and Markets Authority (ESMA) has initiated its first major supervisory review since MiCA entered full force.

The review focuses specifically on digital asset custody.

National financial regulators across the European Union will conduct coordinated inspections of licensed Crypto-Asset Service Providers to evaluate how customer assets are protected.

The inspections will examine multiple operational areas, including governance structures, private key management, wallet security, storage architecture, transaction monitoring, incident response procedures, smart contract risk management, cybersecurity resilience, and reliance on third-party service providers.

The supervisory program will continue through the first half of 2027 before ESMA publishes a consolidated report summarizing its findings.

The review reflects regulators' belief that secure custody remains one of the most critical components of investor protection within digital asset markets.

A Limited Number of Licensed Providers

Despite Europe's enormous cryptocurrency market, relatively few firms have completed the licensing process under MiCA.

As of the regulation's grandfathering deadline, only 244 companies had successfully obtained authorization as Crypto-Asset Service Providers.

That relatively small number illustrates both the complexity of the licensing process and the high compliance standards required to operate legally throughout the European Union.

For investors, the limited number of licensed firms may encourage greater concentration of trading activity among established exchanges with proven regulatory credentials.

This trend could further strengthen the market positions of larger operators such as Kraken and Coinbase.

What Traders Should Watch Next

Several important milestones could shape Europe's cryptocurrency market over the coming months.

The first will arrive on September 30, when the European Commission concludes its public consultation regarding possible MiCA amendments.

Market participants will closely monitor whether lawmakers decide to extend the regulation to cover tokenized securities and additional stablecoin categories.

Another major development will be ESMA's ongoing custody inspections, which are expected to continue through mid-2027.

The findings could lead to new supervisory guidance or additional compliance requirements for licensed exchanges.

Finally, investors will continue watching how exchanges respond to increasing regulatory costs.

Some platforms may pursue additional licensing efforts to remain competitive, while others could follow AscendEX's decision to scale back or exit certain European markets altogether.

Europe's Crypto Industry Enters a New Phase

The first weeks of MiCA enforcement have already demonstrated that regulation is becoming one of the defining forces shaping Europe's cryptocurrency ecosystem.

Kraken's rise to the top of the region's liquidity rankings illustrates how regulatory compliance, deep liquidity, and broad market access can provide a significant competitive advantage.

At the same time, the European Commission's willingness to revisit MiCA so soon after implementation underscores the rapidly evolving nature of digital assets.

From tokenized securities and global stablecoins to digital custody standards and cybersecurity resilience, regulators are preparing for challenges that did not exist when the legislation was originally drafted.

For exchanges, compliance is no longer simply a legal obligation—it has become a strategic asset.

For investors, the coming months may prove just as significant as MiCA's original launch, as Europe continues building what could become one of the world's most comprehensive and influential cryptocurrency regulatory frameworks.