Google's MiCA Ad Policy: A Misstep For Crypto Innovation?

KEY TAKEAWAYS

• Google's MiCA-aligned crypto ad policy favors large, licensed platforms and hardware wallet providers, marginalizing smaller startups and open-source projects due to high compliance costs and certification requirements.
• The ad policy conflicts with MiCA's decentralization goals by requiring self-custodial wallets, which are exempt from MiCA, to obtain a CASP license.
• The ad policy benefits larger companies with the resources to comply with MiCA, sidelining smaller, innovative players and fostering market centralisation.
• Hardware wallets gain an unfair advertising advantage over software wallets, limiting consumer choice and innovation in self-custody solutions.
• Alternative marketing platforms increase risks of misinformation and fraud as companies may turn to less regulated channels like Twitter and Reddit.
• Policy recalibration is needed to differentiate custodial from self-custodial services, engage regulators, and support a diverse, innovative crypto market aligned with MiCA's original intent.

INTRODUCTION

Starting from 23 April 2025, Google has implemented a significant update to its cryptocurrency advertising policy within the European Union ("EU").¹ Under this new directive, only entities licensed as Crypto-Asset Service Providers ("CASPs") in accordance with the EU's Markets in Crypto-Assets Regulation ("MiCA")² are permitted to advertise cryptocurrency exchanges and software wallets on Google's platforms. This article delves into the implications of Google's updated advertising policy ("Policy") examining its impact on self-custodial software wallets, the unintended advantages afforded to hardware wallet providers, and the broader consequences for consumer choice and the decentralisation ethos within the cryptocurrency ecosystem.

THE NEW GOOGLE POLICY

On the face of it, Google's Policy is a mere extension of the MiCA, which fully came into effect in December 2024. Its purpose should have been to enforce the provisions of the MiCA to the extent that any entity advertising crypto-asset services on Google would first have to demonstrate its compliance with the MiCA. However, under the new Policy, Google requires that any entity advertising cryptocurrency exchanges or software wallets in the European Union must:

• Hold a valid license as a CASP under the EU's MiCA, granted by a relevant national competent authority.
• Comply with all other applicable local legal requirements, including any national-level restrictions beyond MiCA.
• Obtain certification from Google before running ads.

Hardware wallet advertising is allowed if the devices only hold private keys and do not offer additional services like trading or exchanging assets, with the same local compliance and Google certification requirements.

This policy applies to 27 EU countries, however, there are transitional periods for certain countries where existing country-based licenses are accepted until mid-2025 to late 2026 (e.g., Finland until June 30, 2025; Germany until December 30, 2025; France until June 30, 2026), after which only MiCA licenses will be accepted for advertising.

HOW DO YOU GET A LICENSE AS A CASP UNDER MICA?

MiCA sets out detailed regulatory requirements for entities seeking CASP licenses to operate legally in the EU:

• Capital Reserves: Depending on services being provided, the MiCA enforces a minimum capital requirement of EUR 50,000 – EUR150,000 as a buffer against risk.³ CASPs are required to maintain this minimum capital requirement, or one quarter of the annual fixed overheads, whichever is higher.
• AML/CTF Compliance: CASPs must implement rigorous anti-money laundering (AML) and counter-terrorist financing (CTF) controls aligned with EU Directive 2015/849 and EBA guidelines. This includes KYC procedures, transaction monitoring, suspicious activity reporting, and maintaining an independent compliance function with strategic oversight.⁴
• Governance: CASPs must have a physical presence in the EU with at least one senior manager or director located in the country of establishment. They must implement fit and proper requirements for management and shareholders, maintain robust internal controls, and have policies for business continuity, ICT risk management, and crisis response in line with EU regulations such as Digital Operational Resilience Act (DORA).⁵
• Operational Requirements: CASPs must have backup and recovery plans, conduct annual compliance audits, and avoid excessive outsourcing of key compliance functions to ensure operational control
• Disclosures: CASPs must provide transparent disclosures, including white papers and risk warnings to clients. They are subject to consumer protection rules similar to other financial service providers and must avoid misleading information.⁶
• Transitional Period: Existing CASPs have an 18-month transitional period to comply with MiCA requirements, including obtaining the license and aligning operations.

MiCA allows EU-wide "passporting" for licensed CASPs, which means that once licensed in one EU member state, CASPs can provide services across the EU under a passporting regime, although member states may impose stricter local rules (e.g., Germany's additional custody licensing).⁷ Failure to comply can bring heavy fines and ongoing regulatory scrutiny.

THE SELF-CUSTODIAL WALLET PARADOX

Under MiCA, self-custodial software wallets (e.g., MetaMask, Phantom) are explicitly excluded from regulation because they act as tools rather than service providers. Users retain full control of private keys, and these wallets do not offer regulated services like trading or custody. However, Google's updated advertising policy (effective April 23, 2025) requires all software wallet advertisers in the EU to hold a CASP license under MiCA, even though self-custodial providers are legally ineligible for such licenses. This creates a paradox:

• MiCA's Intent: Designed to exempt self-custodial wallets from licensing to avoid stifling decentralization and user autonomy.
• Google's Policy: Effectively bans self-custodial software wallets from advertising unless they obtain a CASP license-a practical impossibility.

Consequences for Innovation and User Choice

As a consequence of this provision, self-custodial wallets, despite being legitimate, face advertising restrictions. This limits their visibility and access to users, disproportionately favoring custodial models (e.g., exchanges) or hardware wallets. Additionally, by restricting software wallet ads, Google's policy risks equating "safety" with custodial services or hardware devices, undermining the decentralized ethos of self-custody.⁸

Further on, smaller developers of secure, open-source software wallets may struggle to compete with well-funded hardware wallet brands (e.g., Ledger, Trezor) or licensed custodial platforms, reducing diversity in the self-custody ecosystem.

MiCA's drafters clearly intended to support decentralised and self-custodial tools, recognizing their role in reducing systemic risk and empowering users. Google's policy, however, overrides this intent by lumping all software wallets together, regardless of their actual risk or regulatory status.

HARDWARE WALLETS: THE SURPRISING EXCEPTION

Unlike software wallets, hardware wallets such as physical devices like Ledger or Trezor are not regulated under the MiCA regulation. This is because they are sold as tangible products rather than financial services. Importantly, these wallets do not hold or manage user assets directly and therefore are not classified as CASPs under MiCA.

Google permits hardware wallet manufacturers to advertise on its platform, provided the advertisements focus solely on the wallets' storage capabilities and do not promote purchasing, selling, trading or exchanging of crypto-assets. They are however required to ensure compliance with all local legal requirements and must obtain the certification from Google, just as software wallets are required to.

The Policy thus grants hardware wallets a distinct advantage in terms of brand visibility and user acquisition. In contrast, software-based self-custody solutions, which often include broader functionality and similar levels of security, face restrictions in accessing the same promotional avenues.

This policy shift has broader implications for the self-custody ecosystem. By limiting software wallet visibility, Google's policy indirectly centralizes user choices around hardware devices or custodial platforms, contrary to MiCA's support for decentralization. While Google's intent may be to safeguard users from risky financial promotions, the result is a limited educational landscape that overlooks robust software wallets. Consequently, Users may receive less exposure to secure, non-commercial software wallet options, reducing informed decision-making.

IMPLICATIONS OF THE POLICY

1. Disproportionate Impact on Smaller Players

Google's MiCA-aligned Policy disproportionately benefits large, established cryptocurrency platforms while sidelining smaller players and open-source projects.⁹ Well-resourced platforms such as Binance and eToro can afford the significant costs and complexity involved in licensing and compliance, which allows them to dominate online ad placements. In contrast, smaller startups and non-commercial projects are effectively excluded from advertising access even when fully legal and innovative.

Compounding the issue is the geographic fragmentation of MiCA's rollout across EU member states. A company may be fully compliant within one jurisdiction but still be blocked from advertising because Google applies a one-size-fits-all policy that does not accommodate regional legal differences. This dual burden, being both legally compliant yet commercially restricted, reinforces market centralisation and fosters an oligopolistic structure. Ironically, this contradicts MiCA's stated purpose of encouraging innovation and diversity in the cryptocurrency industry.

2. Evolving Marketing Strategies and Emerging Risks

With Google Ads largely off limits, many cryptocurrency firms might pivot to alternative marketing platforms such as X (formerly Twitter), Telegram, and Reddit. These platforms align with the decentralised and grassroots ethos of the cryptocurrency community, but they come with significantly fewer safeguards. Unlike Google, these channels lack robust ad screening and content moderation mechanisms, creating fertile ground for misinformation and fraud.

This trend also encourages regulatory arbitrage, where firms unable to meet Google's uniform standards in Europe shift their operations or marketing activities to less regulated jurisdictions.¹⁰

3. Unintended Global Influence and Regulatory Arbitrage

Though rooted in EU regulation, Google's MiCA-driven Policy risks becoming a de facto global standard.¹¹ Other countries may adopt similar restrictions simply to maintain access to Google's vast advertising network. While this might appear to support regulatory harmonisation, it can actually create a rigid global compliance model that fails to reflect local regulatory goals or legal frameworks.

Furthermore, if Google's one-size-fits-all policy is adopted globally without sensitivity to local contexts, it could magnify competitive disparities and suppress innovation across international markets.

THE NEED FOR POLICY RECALIBRATION

In conclusion, Google's current policy prioritizes administrative simplicity and risk aversion over nuanced understanding of crypto market dynamics and regulatory intent. By externalizing compliance costs to smaller firms and ignoring the operational realities of self-custodial wallets (which cannot obtain CASP licenses), the policy risks stifling innovation and undermining MiCA's original purpose.

A better approach would include:

• Differentiate Custodial and Self-Custodial Services: Aligning ad eligibility with MiCA's legal definitions to allow lawful, unlicensed self-custodial wallets to advertise.
• Engage with Regulators: Collaborating directly with EU authorities to ensure advertising policies support both innovation and investor protection without undue barriers.

Without such reforms, Google's policy may become a textbook example of how platform rules, when misapplied, can stifle lawful innovation, distort markets toward centralization, and reduce consumer choice in the cryptocurrency ecosystem.

Footnotes

1. Available at: https://support.google.com/adspolicy/answer/16089943.

2. Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, available at: http://data.europa.eu/eli/reg/2023/1114/oj.

3. Article 67 read with Annex IV of MiCA.

4. Articles 18(2)(g), 34(2), 68(8) and 76(1)(a) of MiCA.

5. Articles 59 and 68 of MiCA.

6. Articles 6, 7 and 8 of MiCA.

7. Section 1(1a), Sentence 2 no. 6, read with Section 32(1) of the German Banking Act.

8. Jess Houlgrave, Is Bitcoin Self-Custody Under Threat In Europe?, Bitcoin Magazine, https://bitcoinmagazine.com/politics/is-bitcoin-self-custody-under-threat-in-europe#:~:text=Bitcoin%20extends%20this%20principle%20into,self%2Dcustody%20for%20Bitcoin%20users.

9. MiCA Transition in Portugal: Crypto Industry Faces CASP Licensing Delays in 2025, Wyden (11 Mar 2025), https://www.wyden.io/intelligence/mica-transition-in-portugal-crypto-industry-faces-casp-licensing-delays-in-2025/.

10. Gaming the Rules or Ruling the Game? – How to Deal with Regulatory Arbitrage, European Central Bank (15 Sep 2017), https://www.bankingsupervision.europa.eu/press/speeches/date/2017/html/ssm.sp170915.en.html

11. Google to Enforce MiCA Rules for Crypto Ads in Europe, TradingView (14 April 2025), https://www.tradingview.com/news/cointelegraph:d7fc606d3094b:0-google-to-enforce-mica-rules-for-crypto-ads-in-europe-starting-april-23/.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.