EU warns of rise in crypto scams around MiCA deadline

European regulators are warning of an increase in crypto scams as fraudsters cleverly exploit the chaos surrounding the MiCA licensing deadline. Criminals are posing as exchanges or official regulators to deceive unsuspecting users, all while thousands of companies may be forced to shut their doors.

In short:

• Fraudsters are exploiting the confusion surrounding MiCA closures by posing as exchanges and regulators.
• Only 323 crypto companies hold a valid MiCA licence, while more than 1,700 companies may be forced to stop.
• Companies without a licence are required to ask customers to transfer their funds, something fraudsters are exploiting.

Criminals capitalise on MiCA confusion

Since the MiCA licensing deadline of 1 July passed, crypto companies that have not been granted a licence must actively inform their customers and ask them to move their funds elsewhere. It is precisely this moment that scammers are seizing upon. They send fake messages in the name of well-known exchanges or pose as regulators, with the aim of deceiving users and stealing their crypto.

The scale of the problem is considerable. Of the more than 2,000 parties active in the crypto market, only 323 hold an official MiCA licence. This means that potentially more than 1,700 companies will have to cease their activities in the European Union. The accompanying wave of mandatory communications provides a perfect cover for fraudsters to send fake messages that look legitimate at first glance.

Regulators raise the alarm

European regulators are urging users to be extra vigilant with messages that ask them to move their crypto. There is a real chance that such a message does not come from a genuine exchange, but from scammers abusing the situation. Always check whether communication is sent through official channels and do not simply click on links in emails or messages.

The increase in this type of scam shows how regulation, even when intended to protect consumers, can simultaneously introduce new risks. We previously reported on a former FBI agent charged with stealing nearly $1 million in crypto, which demonstrates that crypto-related fraud is broad and varied. Users would be well advised to transfer their funds only through platforms they have actively sought out themselves, and never via a link from an unexpected message.