Scammers Pose as EU Regulators to Prey on MiCA Deadline Fallout

In brief

• French regulator ESMA said its logo and identity are being misused in falsified documents to promote scams, following the passing of the MiCA registration deadline.
• More than 1,700 unlicensed firms must wind down EU operations, against 323 that have secured a MiCA license.
• Chainalysis puts crypto scam and fraud losses at $17 billion last year, against $6 billion in 2020.

Fraudsters are impersonating European regulators and crypto exchanges to steal from customers caught in the shutdown of unlicensed firms, watchdogs across the bloc have told the Financial Times.

Companies that missed the July 1 deadline to obtain a license under the EU's Markets in Crypto-Assets Regulation are now operating illegally and must tell customers to withdraw or move their holdings. Only 323 firms appear on the register that the European Securities and Markets Authority (ESMA), the EU's markets watchdog, updated at the end of July, while data provider VASPnet estimated last month that more than 1,700 unlicensed companies would have to cease operating.

That has put a large number of people in the position of hurriedly moving funds to an unfamiliar provider, which is precisely the moment criminals want. "This moment is an opportunity for scammers more than usual," Stéphane Pontoizeau, an executive director at France's markets regulator the Autorité des Marchés Financiers (AMF) told the FT.