Ledger CTO Charles Guillemet Says EU MiCA Rules Choke Web3 Startups With Compliance Costs

EU’s Markets in Crypto-Assets Regulation (MiCA) is reshaping the competitive landscape for Europe’s Web3 industry, Ledger CTO Charles Guillemet said, arguing that practical implementation is barring many early-stage startups due to high capital and compliance costs.

“The startup killer: Ledger CTO says the EU's crushing compliance costs are choking Web3 innovation Industry insiders warn that MiCA's steep financial barriers are choking early-stage innovation”

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Under MiCA’s tiered requirements, crypto companies entering different business areas must meet varying minimum capital thresholds, including approximately €50,000 for advisory services and around €150,000 for trading platforms.

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The KuCoin report also says project teams preparing a white paper could range from $4,500 to $87,000 depending on business complexity and legal service requirements.

Guillemet said the rules were intended to unify the market and enhance security, but that the compliance overhead creates a split between companies that can pay and those that cannot.

CoinDesk reports that Guillemet pointed to the listing of spot crypto ETFs in early 2024 as a turning point that sparked demand from traditional banks for institutional-grade custody and asset tokenization.

Guillemet said, "Before, banks mostly wanted to do small innovation projects," and added, "Now, it really changed. The main departments of banks really want to build around crypto, and they want to go all-in on blockchain technology."

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To capture that business, Ledger is expanding past retail hardware wallet services into enterprise-grade infrastructure solutions, including business-to-business (B2B) custody and tokenization.

The KuCoin report says European regulators believe stricter requirements help protect consumers and build a foundation of trust for institutional capital entering the market, as traditional financial institutions move from experimenting with blockchain to larger-scale deployments.

Even as Ledger positions itself as infrastructure for institutional clients, the KuCoin report says Web3 infrastructure struggles to fully eliminate operational risks.

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Ledger has previously disclosed a cloud service breach related to a third-party processor, and the CoinDesk report adds that a major 2020 data breach affected approximately 270,000 customers.

CoinDesk also says a 2023 exploit drained $500,000 from decentralized applications, underscoring the operational risks that Guillemet described as continuing despite large engineering defenses.

Guillemet said, "First and foremost, Ledger is a security company," and CoinDesk reports that Ledger has around 200 to 250 engineers working on the technology and a dedicated security team spending 100% of its time improving the security of its product.