The European Banking Authority on Friday unveiled a sweeping framework to penalize cryptocurrency issuers that violate the European Union’s digital-asset laws, signaling a tougher enforcement stance as the trade bloc finalizes its historic regulatory architecture.The consultation paper published June 26 establishes a standardized playbook for hitting non-compliant issuers of what the EBA considers “significant” tokens with potentially multimillion-euro penalties. Under the proposal, the Paris-based watchdog will deploy a strict two-step process to determine fines, assessing the baseline severity of an infraction before factoring in aggravating or mitigating behavior.The move represents the sharpening of teeth for the EU’s landmark Markets in Crypto-Assets (MiCA) regulation. Introduced to bring order to a historically freewheeling sector, MiCA is the world’s first comprehensive regulatory regime for digital assets, forcing token issuers and crypto service providers to operate with bank-like compliance, consumer protections and capital reserves if they want access to the single European market.The stakes for non-compliance are explicitly designed to be punitive. According to the EBA’s consultation paper, final penalties could reach statutory ceilings of 12.5% of annual turnover for issuers of significant asset-referenced tokens and 10% for significant e-money tokens, or two times the profits generated by the violation, caps meant to deter even the largest global digital-asset operators.Cover screenshot of European Banking Authority’s 14-page consultation paper. Source: EBAThe roll-out of the penalty framework comes at a critical juncture for Europe’s digital asset industry, landing just days ahead of a crucial July 1 deadline. By the start of next month, cryptocurrency firms must have secured formal licenses from national regulators to legally offer their services or market stablecoins within the 27-nation bloc, ending a transitional grace period that allowed many operators to function under looser local rules.Related: Binance faces EU service limits next week as MiCA rules take effectFirms that fail to secure their regulatory passports by July 1 face the prospect of being forced to halt operations entirely or risk triggering the exact infractions, such as unauthorized public disclosures or organizational failures, that the EBA’s new framework is built to penalize.Binance pushes “pause” on EU operations after license failThe world’s biggest exchange operator, Binance, last week notified European Union users that access to key services will be restricted after the exchange failed to secure MiCA authorization from a member state before the July 1 deadline after it withdrew its MiCA license application in Greece. Those restrictions include halting the onboarding of new EU users and limiting certain services for EU-based accounts effective July 1, according to exchange notices shared by users on social media.Notice sent by Binance to customers in Poland. Source: IT_Tech_PLThe notices said users will still be able to withdraw their assets after that date, stating that “all digital assets are still available for withdrawal,” in line with applicable regulatory requirements.Binance recorded $1.96 billion in daily net outflows on Wednesday, following its withdrawal announcement, according to DefiLlama data viewed by Cointelegraph on Sunday. The exchange then saw another $2.52 billion and $1.46 billion in net outflows over the following two days.EU move shows sharp contrast with US enforcement approachThe timing underscores the European Union’s broader strategy to position itself as the dominant global standard-setter for digital finance, contrasting sharply with the regulation-by-enforcement approach seen in the United States. By laying out clear financial penalties right as the licensing mandate takes effect, authorities in Brussels are telling the market that the era of leniency is officially over.The industry now has a three-month consultation window ending September 28 to lobby for changes to the EBA’s penalty methodology. However, with the July 1 licensing cliff edge just days away, executives will have to navigate an unforgiving compliance environment long before the final fining guidelines are formalized under law.

Binance recorded over $400 million in net outflows during the week beginning June 22, as the cryptocurrency exchange announced the withdrawal of its Markets in Crypto-Assets Regulation (MiCA) license application in Greece.According to DefiLlama data viewed by Cointelegraph on Sunday, Binance’s seven-day net outflows amount to 0.3% of its $133.3 billion in tracked assets. Excluding BNB, Binance’s native token, the outflows equal 0.35% of the exchange’s $113.8 billion in crypto assets.Binance led tracked exchanges in weekly net outflows. Source: DefiLlamaNet outflows accelerated on Wednesday, when Binance announced its withdrawal from Greece’s securities regulator, recording $1.96 billion in net outflows, followed by two more days of $2.52 billion and $1.46 billion.The scale of outflows is not unusual for Binance, which regularly records billions of dollars in daily inflows and outflows. The data also does not identify the geographic origin of the fund movements.The outflows came during the final week before the European Union’s MiCA transition deadline. Starting July 1, Binance will restrict onboarding and some services for affected EU users.Daily net flows in the billions of dollars are not unusual for Binance. Source: DefiLlamaMiCA winners are less clear than expectedSeveral rival exchanges have sought to attract Binance users ahead of the bloc’s deadline.OKX, one of the most vocal exchanges courting Binance users, recorded $285.5 million in net inflows over the same period, according to DefiLlama’s rankings based on exchanges’ proof of reserves. The exchange received MiCA authorization in Malta in January 2025.However, OKX was third in weekly net inflows, behind Bitget’s $710 million and Bitfinex’s $400 million. Neither exchange appears on the European Securities and Markets Authority’s (ESMA) interim MiCA register, which was last updated on Friday.Related: Spain regulator rules out extension for non-MiCA compliant crypto companiesBinance says Europe still mattersCryptoQuant analyst Maartunn recently told Cointelegraph that euro trading accounts for just 1% of Binance’s spot volume, which may limit potential MiCA-related setbacks for the exchange.However, Binance’s public messaging is that the company intends to continue pursuing a MiCA license, despite being on pace to miss the July 1 buzzer.“As for Binance and Europe, we take this market seriously. It’s a small part of our business, but an important one, and we’re committed to the EU and our customers there,” Yi He, a co-founder of the exchange, said on Friday.Meanwhile, Binance has started telling some EU users to move funds to self-custodial wallets or other exchanges. A Binance representative told Cointelegraph that the restrictions vary depending on users’ jurisdictions and that no action is required for users not served through a local registered entity.ESMA said in a June 23 statement that crypto service providers unlicensed by July 1 must take “immediate steps” to wind down EU activities, and limit services to actions to sell, transfer, relocate assets or close positions.Magazine: AI is banking the unbanked in Africa… faster than crypto