The European Union’s regulatory framework for crypto assets, known as MiCA, is reshaping competition across the Web3 space. As an unintended consequence, market advantage appears to be shifting from early-stage crypto startups to established traditional financial institutions. Charles Guillemet, CTO of Ledger, a hardware wallet manufacturer, noted that while the new rules aim to create a secure and unified market, the cost of compliance creates a steep barrier for smaller players.
Compliance costs spark debate
Under MiCA, crypto companies face tiered minimum capital requirements. For consulting services, a minimum capital of €50,000 is needed, while launching a trading platform requires at least €150,000. On top of these, additional expenses for legal audits, insurance, and ongoing compliance infrastructure can reach into the millions of euros.
According to the European Commission’s impact analysis for MiCA, issuers can expect to pay between $4,500 and $87,000 for each white paper, depending on the complexity of the regulation and the extent of necessary legal advice.
Charles Guillemet suggested that, although this outcome may not have been intended, the regulation ultimately draws a sharp line between companies that can cover compliance costs and those that cannot. In his view, it will become increasingly difficult for smaller firms to access the market, while larger players enjoy a more protected environment.
For reference, a white paper is the official document that outlines the structure, function, risks, and issuance conditions of a crypto asset. Under MiCA, both the content and format of this document must adhere to strict guidelines.
Banks strengthen blockchain push
European regulators defend these rules as essential for consumer protection and boosting institutional trust. Industry representatives, however, warn that rising costs might stifle innovative startups in Europe.
This divergence comes as traditional finance is moving beyond trial blockchain projects to wider adoption. Guillemet described the launch of spot crypto ETFs in early 2024 as a key milestone. Since then, he has seen a notable increase in demand from banks for institutional custody solutions and asset tokenization services.
Guillemet indicated that, whereas banks previously limited their activities to pilot innovation projects, they now aim to develop full-scale products and infrastructure around crypto, showing a much broader interest in blockchain technology.
Ledger pivots to institutional services
In response to this demand, Ledger is evolving beyond its consumer hardware focus and expanding its infrastructure services for enterprises. Guillemet explained that building such institutional security systems requires significant resources, noting that the company has spent hundreds of millions of dollars over the years to sustain large engineering teams.
Guillemet stated that between 200 and 250 engineers at Ledger work on technological development, with a dedicated team specializing solely in product security. However, even the highest investments in Web3 engineering do not offer absolute protection.
The article recalls that Ledger has previously experienced a cloud service breach affecting a third-party provider, a 2020 data leak impacting 270,000 customers, and a 2023 exploit resulting in a $500,000 outflow from decentralized applications. As traditional banks look to move real-world assets onto public blockchains, they increasingly rely on specialized local crypto security firms to manage these operational risks. In this environment, high regulatory compliance costs in Europe challenge smaller startups while enabling traditional financial institutions to enter the space more aggressively.
