While the Markets in Crypto-Assets Regulation (MiCA) promised harmonized crypto regulation across the European Union, the reality of implementation reveals a more nuanced landscape. Across Central and Eastern Europe, regulatory authorities are emphasizing different aspects of MiCA compliance, creating distinct supervisory cultures that crypto firms must navigate strategically. From Austria's detailed applicant guidance to Romania's focus on anti-money laundering integration, understanding these regional variations has become crucial for successful EU market entry.

In this comprehensive Q&A, Dr. Oliver Völkel, LL.M., Partner at CERHA HEMPEL, provides authoritative insights into MiCA's practical implementation across seven CEE jurisdictions. As a recognized pioneer in crypto asset law and editor of leading specialist works including "Blockchain Rules" and "Crypto Assets," Dr. Völkel brings unparalleled expertise to the complex regulatory terrain facing crypto-asset service providers.

His client portfolio—spanning well-known layer-1 protocols, DeFi applications, mining and validator pool operators, as well as traditional financial institutions—positions him uniquely to address the intersection of innovative blockchain technology and evolving regulatory frameworks. Through CERHA HEMPEL's multi-jurisdictional platform across Austria, Bulgaria, Czech Republic, Hungary, Romania, Slovakia, and Slovenia, Dr. Völkel witnesses firsthand how identical EU legislation translates into varied supervisory approaches.

The stakes are particularly high for decentralized finance protocols, where MiCA's traditional assumptions about identifiable service providers clash with the permissionless nature of blockchain innovation. As recent joint positions from Austria, France, and Italy signal stricter enforcement against regulatory arbitrage, firms can no longer rely on jurisdictional shopping as a compliance strategy. Instead, success requires sophisticated understanding of how local supervisory cultures interpret pan-European rules.

Key Areas Covered:

• Regional variations in MiCA implementation across CEE markets
• Practical frameworks for DeFi protocol compliance while preserving decentralization
• Strategic considerations for EU market entry and optimal licensing jurisdiction selection
• Passporting rights and multi-country expansion strategies under MiCA

Expert analysis from a pioneer in crypto asset law, providing essential guidance for navigating MiCA's regional complexities.

Question 1: MiCA Implementation Across Central and Eastern Europe

With CERHA HEMPEL's extensive presence across Austria, Bulgaria, Czech Republic, Hungary, Romania, Slovakia, and Slovenia, you have a unique perspective on how MiCA is being implemented across Central and Eastern European markets. What variations are you seeing in national implementation approaches across these jurisdictions? How are regulatory authorities in CEE countries interpreting MiCA's requirements differently, and what practical implications does this have for crypto-asset service providers seeking to operate regionally?

Although MiCA applies directly across the EU, its implementation still reflects the institutional focus and supervisory culture of individual authorities. Across Central and Eastern Europe, the differences are less about legal divergence and more about the aspects of MiCA that regulators are prioritising as they build capacity.

Austria, for example, has concentrated on translating its earlier practice under the virtual asset service provider regime into the MiCA framework, placing particular emphasis on detailed guidance for applicants and close supervisory engagement. The Austrian FMA has, for example, published comprehensive guidance for potential applicants. Hungary has placed attention on developing its position as a regional fintech hub and has been exploring the regulatory treatment of innovative business models through a case-specific lens. In the Czech Republic, regulators have directed significant resources to clarifying the borderline between MiCA and traditional securities regulation, especially in relation to tokenised assets. Romania and Bulgaria have focused heavily on the alignment of MiCA with anti-money laundering rules and the integration of supervisory functions into existing financial oversight structures. Slovakia has worked on strengthening cooperation with EU institutions to ensure consistent application of MiCA in the context of cross-border supervision. Slovenia, meanwhile, has given particular weight to consumer protection and transparency, especially in retail-facing crypto services. These are not real differences but particular focus points.

One area of common importance is the treatment of reverse solicitation. ESMA's Guidelines on Reverse Solicitation made clear that MiCA must be interpreted strictly: only when a service is provided exclusively at the initiative of the client may a third-country firm operate without a MiCA license. Building on this, Austria, together with France and Italy, published a joint position paper emphasising the risks of regulatory arbitrage and calling for a strong supervisory line on third-country firms. While supervisory intensity may vary depending on resources and priorities, firms should expect the legal standard to be applied consistently across the region.

For crypto-asset service providers, the key practical takeaway is that the regulatory environment in CEE is not fragmented but differentiated. Each country highlights different facets of MiCA in its supervisory agenda, and firms seeking regional operations must be attentive to these nuances. Choosing a licensing hub therefore remains a strategic decision, but ongoing dialogue with national authorities across the region is equally important to ensure that compliance frameworks are responsive to local supervisory expectations.

Question 2: DeFi Protocol Compliance Under MiCA's Framework

DeFi protocols present some of the most complex regulatory challenges under MiCA, particularly around questions of decentralization, governance token classification, and service provider identification. Based on your expertise in DeFi regulatory structuring, how are you advising clients to navigate MiCA's application to decentralized finance protocols? What practical frameworks are emerging for determining when DeFi activities trigger licensing requirements, and how should protocol developers structure their operations to achieve compliance while preserving decentralization principles?

Decentralised finance continues to pose challenges for MiCA, which presupposes that there is always a responsible party capable of meeting licensing and conduct obligations. For many DeFi protocols, this assumption does not fit neatly. Nevertheless, firms cannot rely on decentralisation alone as a defence against regulation.

The first question in advising clients is classification. Governance tokens that confer control or economic rights may fall under financial instruments regulation (MiFID II), while tokens designed for protocol participation typically fall within MiCA as crypto-assets. Algorithmic stablecoins are specifically captured under the provisions on e-money tokens and asset-referenced tokens, even if their value stabilisation mechanisms operate autonomously. Classification determines not only whether MiCA applies but also which parts of it.

The second question is whether there is an identifiable entity. Even highly decentralised protocols often have foundations, developers, or operators of user interfaces. Regulators apply a substance-over-form approach: if a person or entity exercises meaningful influence over the functioning of the system, they are likely to be treated as a service provider. To address this, many projects establish a 'gateway entity' that takes on compliance responsibilities for the user-facing elements, leaving the protocol itself to function as permissionlessly as possible.

The design of governance is also central. Where teams commit to limited or no control over upgrades, adopt on-chain governance, or disable administrative keys, they strengthen their case that no central operator exists. At the same time, regulators expect transparent documentation and engagement. Protocols that openly explain how they manage risk and safeguard users are more likely to be accepted as legitimate participants in the market. Insofar, there definitely is a 'political' side to crypto-markets regulation, and financial markets regulation more broadly.

What is emerging is a pragmatic framework. Core protocols may remain decentralised, but the points of user interaction (custodial wallets, fiat gateways, front-end websites) are increasingly structured under entities capable of being licensed. This allows developers to preserve decentralisation where it matters, while meeting regulatory obligations where interaction with traditional financial systems occurs. In practice, compliance becomes part of protocol design rather than an afterthought, and this mindset is now a hallmark of mature DeFi projects in the European market.

Question 3: Cross-Border Crypto Operations and EU Market Access Strategy

Given CERHA HEMPEL's multi-jurisdictional platform across seven EU countries, what strategic considerations should international crypto firms prioritize when establishing EU operations under MiCA? How do you advise clients on optimal jurisdiction selection for licensing, and what are the key factors firms should evaluate when deciding between single-market entry versus multi-country expansion strategies? What role do passporting rights play in your clients' business development plans, and how are you helping them structure operations to maximize regulatory efficiency across the CEE region?

For international firms, entry into the EU market under MiCA is a strategic choice as much as a legal one. A license can be obtained in any EU Member State, but the jurisdiction selected will influence reputation, speed to market, and operational efficiency. Authorities differ in the areas they emphasise: some focus heavily on governance standards, others on anti-money laundering integration (such as Austria), and others on investor protection in consumer markets. Selecting a licensing hub therefore requires a holistic assessment of the regulator's supervisory style, the available infrastructure for compliance, and the long-term scalability of operations.

Once licensed, passporting rights allow firms to extend services across the EU. This is one of MiCA's great innovations, but it should not be mistaken for automatic acceptance everywhere. Supervisors remain entitled to monitor cross-border activity (in particular when it comes to AML-compliance), request additional information, and scrutinise marketing practices. For firms, the practical reality is that passporting reduces duplication but does not eliminate the need for local engagement.

The question of whether to pursue a single hub or multi-country presence depends on the business model. Firms targeting institutional services often succeed with a single strong license and EU-wide passporting. Those with a retail focus sometimes benefit from additional local establishments to address language, customer protection expectations, or consumer trust. A phased approach is often most effective: securing an initial license in one jurisdiction, extending services across the Union, and then building deeper local presence in priority markets as business grows.

At CERHA HEMPEL, we advise clients to think of licensing not only as a compliance step but as part of corporate strategy. This includes structuring governance so that new services can be added without major restructuring, designing modular compliance systems that adapt to national expectations, and planning for evolving supervisory practices. With a multi-jurisdictional platform in CEE, we are able to help clients navigate both the EU-level framework and the country-specific nuances that shape how MiCA is experienced on the ground.

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