EU Ban on Tax-Haven Crypto Firms Could Breach Trade Law, Commission Warns

Lawmaker proposals to blacklist non-compliant firms are getting a rough ride as landmark MiCA legislation reaches its final stages.

AccessTimeIconMay 10, 2022 at 4:54 p.m. UTC
Updated May 11, 2023 at 5:06 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A proposed European Union ban on crypto providers offering services from tax and money laundering havens raises “serious doubts” and could breach global trade rules, according to a European Commission document seen by CoinDesk.

Lawmakers from the European Parliament have said that crypto-asset providers shouldn't be authorized to offer services in the bloc if they’re from shady jurisdictions like Panama, but Commission officials, mediating late-stage talks on the law known as the Markets in Crypto Assets Regulation (MiCA), don’t agree.

“No such prohibition exists in other sectoral legislation,” and it’s not clear why they should apply only to crypto, said the paper, produced to influence talks taking place between governments and lawmakers that are seeking to hash out a final version of the MiCA law.

“Such a prohibition … might create barriers to the provision of services in the EU and therefore might be seen as constituting a breach of international commitments taken” at the World Trade Organization, it added.

Officials “have serious doubts about the feasibility and proportionality” of a blacklist of non-compliant crypto asset service providers, which lawmakers wanted to see maintained by the EU securities-market watchdog ESMA.

The Commission paper said the criteria for the list were unclear, and that any such initiative would be better left to a wider redraft of anti-money laundering (AML) laws that covers sectors such as banking and the legal profession.

“We would urge the [European Parliament] to reconsider and if still deemed necessary await discussions on the AML Regulation,” the paper said.

The Commission document is badged as a “non-paper,” meaning it does not represent a formal view of the institution. The Parliament voted on its favored version of the draft law back in March, narrowly avoiding restrictions on energy-intensive proof-of-work technology that some characterized as a bitcoin (BTC) ban.

The EU blacklists jurisdictions which it views as encouraging tax avoidance or having sloppy money-laundering controls. The latest version of the lists include territories such as the U.S. Virgin Islands, Cayman Islands and Panama.

A Commission spokesperson declined to comment.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.