The European Commission has opened a public consultation on proposed updates to the EU’s Markets in Crypto-Assets (MiCA) framework, signaling that Brussels plans to refine how its landmark crypto rules address newer parts of the market. The consultation—initiated in May—comes as full application and enforcement of MiCA began on December 30, 2024, with the first licensing steps rolling out in the early months of 2025.

Some in the industry have already started calling the expected revision “MiCA 2.0,” with regulators aiming to tackle gaps left by the initial law. According to Katie Harries, director and head of policy for Europe at Coinbase, refinements could help keep the EU’s framework “competitive” as digital-asset regulation moves into a second phase—particularly for decentralized finance (DeFi), stablecoins, and tokenization-related activity.

Key takeaways

• Brussels’ consultation is structured to adjust MiCA’s scope and definitions, tighten rules for certain token categories, and broaden coverage to topics not addressed in MiCA 1.0.
• Stablecoin policy is expected to be highly political because the rules could change depending on whether stablecoins are treated like trading instruments or payment infrastructure.
• For DeFi, regulators are looking for practical ways to evaluate “how decentralized” a crypto-asset service provider (CASP) is, rather than treating decentralization as a simple yes-or-no concept.
• EU lawmakers are also seeking input on prediction markets, including whether existing EU regimes would apply and where potential conflicts between frameworks might arise.
• The consultation runs until Aug. 31, but industry observers expect the legislative process to take years, with concrete proposals unlikely before 2028.

MiCA set the baseline—now the EU wants to recalibrate

MiCA’s rollout marked the EU’s attempt to establish a unified approach across member states, replacing fragmented national rules. Harries told Cointelegraph that MiCA “helped set an early global benchmark for digital asset regulation” and gave the EU a “first-mover advantage” by delivering a single, harmonised rulebook for crypto.

In practical terms, Harries said the law is meant to give consumers more transparency and protection, while giving businesses enough regulatory clarity to plan investment and expansion across the bloc. For Coinbase, she added, MiCA has also served as a foundation to scale operations in Europe into the next stage of adoption for both retail and institutional users.

Even so, Brussels is now preparing changes ahead of revisions and additions to the framework. The Commission’s consultation is divided into four parts: updating regulatory scope and definitions for crypto assets other than asset-referenced tokens (ARTs) and e-money tokens (EMTs); setting requirements for EMTs, ARTs and their issuers; defining a legal framework for crypto-asset service providers (CASPs); and addressing areas that MiCA 1.0 did not cover—such as DeFi and prediction markets.

Stablecoins: the use-case determines the regulatory priority

One section of the consultation stands out for its potential downstream effects: stablecoins and related requirements. Catarina Veloso, director of regulatory and compliance at Notabene, described the stablecoin-focused part as the “longest and arguably the most politically charged” segment of the process.

Veloso noted that the way stablecoins are used—whether as a mainstream retail payment tool, a wholesale settlement rail, or as a supplement to existing cross-border payment methods—could heavily influence what rules the EU ultimately prioritizes.

In her view, if stablecoins are treated mainly as crypto trading instruments, regulators may concentrate on investor protection and market integrity. If they are treated more like payment infrastructure, the regulatory center of gravity shifts toward redemption mechanics, liquidity requirements, reserve management, operational resilience, and supervisory reporting.

That shift matters because the risk profile of stablecoins can vary depending on scale, who uses them, and where they sit inside the broader financial system. “What risks they carry,” Veloso said, “depend heavily on how they are used, at what scale, by whom, and in connection with which parts of the financial system.”

Coinbase’s policy priorities focus on making euro stablecoins more competitive within the EU rule set. Harries said Coinbase would like MiCA 2.0 to recalibrate elements including reserve rules, stablecoin rewards, and the multi-issuance model. She argued that allowing a larger share of reserves to be held in “high-quality sovereign assets” could reduce risk without undermining safety.

Another issue is rewards. Veloso pointed out that EMT issuers are currently prohibited from offering interest, which she said can weaken the competitiveness of euro-denominated stablecoins. In practice, that could push users either toward foreign-currency stablecoins or toward yield strategies that sit outside the regulated perimeter.

Harries said Coinbase wants MiCA to permit non-interest incentives—such as cashback and loyalty programmes—stating that these are common features in payments and may support consumer choice and competition.

DeFi under MiCA: regulators want measurable decentralization

A core limitation of MiCA 1.0 is that it does not cover CASPs that are “fully decentralized” and operate without intermediaries. But Veloso cautioned that decentralization is rarely binary in reality.

To build a workable policy, regulators need a way to assess the degree of decentralization and decide which indicators should matter. That includes whether the protocol is under particular control, who holds governance rights, the status of administrative keys, whether the front-end is controlled by a central party, who captures revenue, how upgrades are handled, and whether identifiable persons can materially influence outcomes.

Veloso also said regulators are looking for practical rules to determine when the EU should treat access to DeFi platforms as a regulated service. She explained that, even if platforms themselves are exempt because they are decentralized, the broader question is whether firms that connect users to those platforms should still conduct due diligence obligations vis-à-vis their clients.

Legal practitioners highlighted that this is already a live compliance question. Miroslav Đurić, a senior associate at Taylor Wessing, said many CASPs already connect clients with DeFi platforms, and because those platforms are exempt, regulators are now asking whether CASPs should meet fiduciary duty expectations through due diligence.

Đurić also noted that the Commission may consider different approaches, potentially including options that restrict client connections to DeFi platforms only if they are certified under a future certification regime.

Prediction markets: fitting them into EU frameworks may be tricky

Prediction markets are another area where MiCA’s initial scope is not fully settled. The EU currently lacks a unified regulatory structure for these markets, and they are banned in some member states.

The consultation seeks views on whether prediction markets provide economic benefits for consumers, and whether they should fall under MiCA or the Markets in Financial Instruments Directive (MiFID). Đurić said the answer depends on the specific contracts offered by each platform.

Because event contracts can have different characteristics, a platform operator could find itself subject to multiple, sometimes conflicting regimes—ranging from MiFID II rules to gambling-related regulation or potentially MiCA requirements—depending on contract structure.

Deadlines—and the long timeline ahead

Crypto industry observers say they plan to remain engaged with Brussels during the consultation process. Harries said an effective MiCA 2.0 will require ongoing “dialogue between industry, policymakers and regulators,” including learning from how the existing framework works in practice and refining parts where additional clarity or flexibility could support the next phase of growth.

While the comment period ends on Aug. 31, Đurić suggested the broader legislative process could take years. He said it is unlikely that concrete legislative proposals will be adopted before 2028, given both the complexity of the topics and the usual pace of EU lawmaking.

For market participants, the key next step is watching how regulators decide to translate stablecoin and DeFi policy questions into enforceable definitions—especially around how decentralization is assessed and how payment-versus-trading use cases shape the rules. Those choices will likely determine how quickly the EU’s second-phase framework can become operational for issuers, platforms, and intermediaries.

In May, the European Commission opened a comment period, seeking feedback on regulations for the cryptocurrency and blockchain industries. 

The comment period will precede eventual revisions and additions to the Markets in Crypto Assets (MiCA) legislative framework. Some have already dubbed the expected new framework “MiCA 2.0.”

Katie Harries, director and head of policy for Europe at Coinbase, told Cointelegraph that there are several key areas where “refinements could help ensure the framework remains competitive in the next phase of digital asset regulation.”

With an updated version of EU crypto law, the crypto industry is looking for more regulatory clarity in DeFi, stablecoins and tokenization.

MiCA was just the first step

Full application and enforcement of MiCA rules began on December 30, 2024, with the first licenses issued in the first months of 2025.

While the legislative process was long and complex, the EU still managed to create a regulatory framework for crypto ahead of the United States. Per Harries, “MiCA helped set an early global benchmark for digital asset regulation and gave the EU a first-mover advantage.”

It represented an “important first move” for the EU which created a “a single, harmonised rulebook for crypto” among its member states. “It gave consumers greater protection and transparency, while providing businesses with the regulatory clarity needed to build, invest and grow across the bloc.”

Harries said that, for Coinbase, MiCA provided a foundation on which it can expand its business in Europe into “the next phase of adoption across both retail and institutional markets.”

Now, Brussels is looking to recalibrate its landmark legislation. The consultation is split into four parts:

1. Regulatory scope and definitions for crypto assets other than asset-referenced tokens (ARTs) and e-money tokens (EMTs)
2. Requirements for EMTs, ARTs and their issuers
3. Defining legal framework for crypto-asset service providers (CASPs)
4. Topics that MiCA 1.0 didn’t cover e.g., DeFi and prediction markets

Stablecoin discussion has regulatory consequences

Per Catarina Veloso, director of regulatory and compliance at Notabene, part 2, which would affect stablecoins, is “longest and arguably the most politically charged section of the consultation.”

How stablecoins are used, be it as a mainstream retail payment instrument, a wholesale settlement rail, or a “complement to existing payment methods for cross-border payments,” could have a significant effect on how stablecoin policy is made.

“If stablecoins are treated mainly as crypto trading instruments, the focus is likely to remain on investor protection and market integrity. If they are treated as payment infrastructure, then redemption, liquidity, reserve management, operational resilience and supervisory reporting become much more central.”

What risks they carry “depend heavily on how they are used, at what scale, by whom, and in connection with which parts of the financial system.”

Harries said that Coinbase would like to see MiCA 2.0 “make euro stablecoins more competitive by recalibrating rules around reserves, rewards and the multi-issuance model.” Allowing a greater share of stablecoin reserves to be held in “high-quality sovereign assets could reduce risk without compromising safety.”

Another aspect is stablecoin rewards. Currently, EMT issuers are prohibited from offering interest. But, per Veloso, “this can weaken the competitiveness of euro-denominated stablecoins and push users either toward foreign-currency stablecoins or toward yield structures outside the regulated perimeter.”

Harries said that “MiCA should allow non-interest incentives such as cashback and loyalty programmes, which are standard features across payments and help drive competition and consumer choice.”

Bringing DeFi and prediction markets into the fold

Presently, MiCA does not cover CASPs that are fully decentralized and operate without any kind of intermediary. Veloso noted that, while it sounds simple, “decentralisation is rarely binary.”

To form an informed policy around DeFi, EU regulators must know how to assess whether a CASP is fully decentralized and “what indicators should matter: control over the protocol, governance rights, admin keys, front-end control, revenue capture, upgradeability, or the ability of identifiable persons to influence outcomes.”

According to Miroslav Đurić, a senior associate at Taylor Wessing, many CAPSs already connect their clients with DeFi platforms. But since these platforms are exempt from MiCA, regulators are now asking “whether CASPs should meet their fiduciary duty vis-à-vis clients by conducting due diligence over DeFi platforms that they make accessible to their clients.”

“The Commission appears to be ready to explore different approaches incl. some that might only permit CASPs to connect their clients with DeFi platforms that are certified (under some new certification regime).”

Prediction markets are also a hot topic currently considered in the EU. Currently there is no unified regulatory structure, and prediction markets are banned in some countries. 

The Commission is seeking comments on whether these offer any economic benefit for consumers, and whether they fall under MiCA or Markets in Financial Instruments Directive (MiFD).

Đurić said this will depend on the nature of the contracts themselves. “Depending on the event contracts available on the platform […] a platform operator can easily become subject to requirements stipulated under different, sometimes conflicting regulatory frameworks: ranging from MiFID II over gambling to MiCA regulatory framework.”

What’s next?

Crypto industry observers say they intend to remain in dialogue with Brussels throughout the process. Harries said that a new, effective MiCA will require “dialogue between industry, policymakers and regulators, learning from how the framework is working in practice and refining areas where greater clarity or flexibility can help support the next phase of growth across the region.”

The period for comment ends on Aug. 31, but according to Đurić, the total process could take years. 

“Given the level of complexity of the points raised in the consultation as well as the usual pace at which the EU legislative process moves […] it is hardly expectable that any concrete legislative proposals will be adopted before 2028.”

Urbelis said he believes AI could eventually reshape the standard of care around smart contract development. Historically, teams could point to the cost and complexity of audits as a reason certain reviews were not performed. That argument becomes more difficult when sophisticated security analysis is available on demand.

“A clean AI report will be seen as no defense,” he said. “A plaintiff may well argue it the other way: the tool existed, it was cheap, and you should have caught it.”

The prospect raises broader questions for the industry: if AI-powered security reviews become ubiquitous, will investors expect them before funding projects, and could failing to run AI-assisted audits eventually be viewed as negligence?

Despite the technology’s promise, neither researcher said he believes AI is poised to replace human auditors.

While machines excel at identifying coding flaws, Urbelis said they remain weaker at spotting the economic and incentive-based vulnerabilities that have contributed to some of crypto’s largest losses. “The bugs that drain treasuries often turn on intent and adversarial incentives,” he said. “Those still need an experienced human in the room.”

Schwed offered a similar warning. “‘Claude, audit my smart contract, make no mistakes’ is not a security program,” he said. “If the person running the tool can’t evaluate what comes back, you haven’t bought security, you’ve bought a false sense of it.”

Pudgy Penguins is pushing its NFT identity deeper into mainstream retail with a new chapter for its trading card game. The Ethereum-based NFT brand says its Vibes Series 3 rollout is arriving at Target stores across the United States, marking what it calls the largest retail expansion for the card game so far.

In a press release shared with Cointelegraph, the company said the launch adds new gameplay mechanics and fresh artwork, alongside characters from its Moonbirds NFT collection. With Series 3, Pudgy Penguins also reports that a total of 15 million trading cards have been circulated.

Key takeaways

• Pudgy Penguins’ Vibes Series 3 is being rolled out nationwide at Target, expanding retail distribution beyond earlier launches.
• The company says total circulated Vibes cards will reach 15 million with the new set.
• Series 3 introduces additional gameplay mechanics and features artwork and appearances tied to the Moonbirds collection.
• Pudgy Penguins continues building a consumer franchise around its NFT IP via toys, licensing, and games—not just on-chain collectibles.

Vibes Series 3 arrives at Target

Vibes began as a way to translate Pudgy Penguins’ NFT ecosystem into a physical collectible format. With Series 3, the project is broadening its consumer reach through a major U.S. retailer.

According to the press release provided to Cointelegraph, the Target rollout is positioned as the biggest retail expansion to date for the Vibes trading card game. The set is designed to be more than a simple collectible: Pudgy Penguins says it includes additional gameplay mechanics, which can help keep the physical product connected to the broader “play-to-collect” narrative behind the project.

The new release also leans on cross-collection recognition. Pudgy Penguins says Series 3 incorporates original artwork and characters from its Moonbirds collection, adding a visible bridge between separate NFT communities in a format that doesn’t require buyers to navigate a crypto wallet.

Turning NFT IP into retail products

The Target push reflects a strategy Pudgy Penguins has been pursuing for years: use its NFT-born intellectual property as the foundation for consumer entertainment. While the trading card game is still rooted in its NFT universe, the company is increasingly developing physical and mainstream digital products that can appeal to audiences who may not engage with NFTs directly.

That approach has already shown up in retail. Pudgy Penguins has expanded into toys and other merchandising, and it previously announced that its physical toys entered more than 2,000 Walmart stores in 2023. In May 2024, CEO Luca Netz said in remarks to PRNewswire that more than 1 million toys had been sold over the preceding 12 months.

Pudgy Penguins also highlighted a licensing model that ties ownership to physical product value. The company says NFT holders can receive 5% of net revenue from physical products featuring their individual penguins, creating a continued link between on-chain ownership and offline sales.

For investors and traders watching NFT sector developments, this kind of mainstream retail rollout matters because it suggests a revenue model that is not solely dependent on market activity for the underlying NFTs. If adoption of physical products grows, it can reduce how directly the brand’s audience and monetization are tied to NFT speculation cycles—though the long-term economic balance remains something the market will need to monitor.

Series 3 follows earlier releases—and a gaming push

Pudgy Penguins’ Vibes rollout comes after two earlier trading card game releases, with Series 3 now positioned as the next step in the product roadmap. The brand says Vibes was developed in partnership with Orange Cap Games, and that Series 3 is the latest installment in a system meant to extend the IP beyond simple digital collectibles.

Beyond cards, Pudgy Penguins has also been working to bring its characters into blockchain gaming. In 2025, the company launched the skill-based game Pengu Clash on The Open Network. Netz described gaming as a way to expose the project’s intellectual property to wider audiences, treating play as a growth channel for the IP.

More recently, Pudgy Penguins expanded into mobile gaming with Pudgy Party. The company said in August 2025 that downloads for the title had exceeded 1 million. However, it later announced that it would halt further development of the game and redirect resources toward a browser-based project called Pudgy World, according to earlier Cointelegraph coverage.

This shift—expanding into new formats and then consolidating efforts—highlights a pattern common to emerging entertainment products: not every title keeps its original roadmap, and resources often move toward the games that show the clearest traction or fit with the brand’s longer-term distribution goals. For readers following Pudgy Penguins, the immediate question is whether the combined push across retail and gaming will reinforce each other, driving brand awareness that translates back into the community around Pudgy NFTs.

Where Pudgy Penguins sits in the NFT landscape

Even as the company emphasizes consumer products, Pudgy Penguins remains an established NFT brand in market terms. The press release points to NFT Price Floor data, noting that the project is the fourth-largest NFT collection by market capitalization, based on the tracker.

That positioning can be important context for why partnerships and cross-collection collaborations are feasible in physical formats. Large, recognizable NFT collections typically have more leverage to coordinate with other communities and to attract retail-facing distribution opportunities, especially when the product framing is tied to brand familiarity rather than crypto mechanics alone.

At the same time, the Vibes Series 3 announcement doesn’t specify how physical sales will translate into measurable on-chain outcomes. While the licensing structure suggests a direct economic bridge for holders, the broader impact on NFT demand, secondary-market behavior, or user conversion will likely be something to watch over the coming retail cycle—particularly after the Target rollout begins.

Next, investors and collectors will likely focus on how quickly Vibes cards sell through at Target, whether Series 3’s additional gameplay mechanics drive repeat purchases, and if Pudgy Penguins’ gaming and retail efforts continue to strengthen the brand’s customer funnel rather than fragment it across too many initiatives.

Attorney Ian R. Cohen has filed a new court rebuttal opposing efforts to revive a lawsuit that seeks control of roughly 3.8 million Bitcoin worth an estimated $238 billion, including wallets linked to Bitcoin creator Satoshi Nakamoto.

According to a June 20 X thread posted by Galaxy Digital research head Alex Thorn, Cohen’s June 19 filing pushes back against attempts by plaintiffs’ attorney David Lin to overturn a court-ordered stay in a New York case involving 39,069 Bitcoin wallet addresses.

The lawsuit was brought by anonymous plaintiffs identified as ABC Company, XYZ Company, and Noah Doe, who argue the wallets should be treated as abandoned property under New York law.

Earlier this month, New York Justice Kathy King granted a stay after Cohen sought permission to participate in the case as amicus counsel. A hearing related to the amicus application has been scheduled for July 14.

Cohen argued in his latest filing that the stay was issued by the court itself after reviewing the matter and was not simply granted at his request. According to the filing, the court exercised its authority under New York procedural law when it paused the proceedings.

Cohen says dormant wallets do not qualify as abandoned property

At the center of the dispute is the plaintiffs’ claim that long-inactive Bitcoin wallets can be classified as abandoned assets and transferred through a court order. Court documents cited by crypto.news previously showed that the plaintiffs contend the original owners can no longer access the funds because of an alleged technical flaw.

Among the addresses listed in the lawsuit are wallets associated with Satoshi Nakamoto and the “1Feex” address, which blockchain researchers and crypto investigators have linked to Bitcoin stolen during the Mt. Gox breach.

Cohen has repeatedly challenged the legal basis of the case. In earlier statements, he argued that New York’s lost-property laws do not apply to self-custodied Bitcoin, that inactivity alone does not establish abandonment, and that private keys fall outside the jurisdiction of New York courts.

His latest filing also disputes the practicality of the lawsuit. According to Cohen, the defendants are not identifiable individuals but 39,069 pseudonymous Bitcoin addresses, making it unlikely that the affected parties would appear in court to defend their interests.

The filing argues that lifting the stay could allow plaintiffs to secure a default judgment against the wallet addresses without meaningful opposition, potentially affecting property rights tied to billions of dollars worth of Bitcoin.

Recent blockchain activity challenges abandonment claims

Elsewhere in the filing, Cohen challenged the factual foundation of the abandonment argument by pointing to evidence that some of the targeted wallets have recently been active on-chain.

According to the filing, the complaint itself identified addresses that recorded outbound transactions, indicating that someone with access to the associated private keys had moved funds. Cohen cited those transactions as evidence that at least some wallet owners remain capable of controlling their Bitcoin.

Galaxy researchers reached a similar conclusion. Thorn said Galaxy identified 52 named addresses that collectively moved 34,335 BTC, while 29 of those addresses transferred 12,302 BTC after receiving notice of the lawsuit.

Criticism of the case has also emerged elsewhere in the crypto industry. Last month, Ripple CTO Emeritus David Schwartz questioned how a New York court could assert authority over Bitcoin wallets whose owners are unknown and scattered across a decentralized network. 

According to Schwartz, the lawsuit’s jurisdictional argument was one of its most serious weaknesses, and he warned that the legal theory could ultimately result in people losing control of their crypto assets.

The debate has even drawn comparisons to future discussions about dormant Bitcoin holdings. Recently, Binance founder Changpeng Zhao suggested that wallets linked to inactive owners, including those believed to belong to Satoshi, could one day be frozen after a transition to quantum-resistant cryptography if their holders fail to move funds within a designated migration period. 

Zhao said any such change would require community consensus and would not be decided by a single individual.