Gate Europe chief executive Giovanni Cunti has cautioned that some cryptocurrency firms already licensed under the European Union’s Markets in Crypto-Assets Regulation may still exit the bloc due to mounting compliance costs.

Cunti highlighted the challenges during a Monday interview, noting that stricter requirements have raised barriers for sustained operations. He indicated that several licensed entities could struggle to maintain the necessary resources over the long term.

The MiCA framework’s 18-month transition period concluded on July 1, compelling firms serving EU clients to obtain authorization or halt regulated activities. Several exchanges responded by limiting or withdrawing services in parts of the region.

Cunti observed that the regulatory environment, while enhancing investor protections, may discourage innovation compared with jurisdictions offering lighter oversight. Some projects could opt to establish operations elsewhere to avoid the compliance burden.

The number of authorized crypto-asset service providers has continued to expand, reaching 294 after the European Securities and Markets Authority added 14 firms on Friday.

Cunti noted that the reduction in market participants from thousands to hundreds creates opportunities for remaining providers, particularly as customers seek to maintain access to EU services.