Key Highlights
- ESMA has called on unauthorized crypto-asset service providers (CASPs) to begin an orderly exit from the EU market.
- The directive comes ahead of the July 1, 2026, end of MiCA’s transitional period.
- Firms must stop onboarding new EU customers, halt marketing activities, and limit operations to client asset withdrawals and transfers.
The European Securities and Markets Authority (ESMA) has issued a fresh warning to crypto companies operating in the European Union without authorization under the Markets in Crypto-Assets Regulation (MiCA), instructing them to begin winding down operations immediately as the regulatory transition period comes to an end on July 1, 2026.
In a public statement released today, ESMA said that while many crypto-asset service providers (CASPs) have already secured MiCA licenses, a number of firms, including some major providers currently serving European customers under older national frameworks, may not receive authorization before the deadline.
As a result, ESMA expects those firms to exit the EU market in an orderly manner while ensuring that customer assets remain protected throughout the process.
ESMA demands immediate wind-down measures
According to the regulator, unauthorized crypto firms must immediately stop onboarding new European clients and cease all marketing, promotional, and solicitation activities. The watchdog also directed firms to restrict their services solely to actions necessary for clients to withdraw, transfer, reallocate, or close their positions.
Custody services may continue only for the limited period required to facilitate an orderly exit.
“ESMA expects unauthorised CASPs to take immediate steps to wind down their EU activities in an orderly manner, while also safeguarding clients’ interests and mitigating risks to market integrity,” the authority stated.
A major focus of the guidance centers on customer communication. ESMA said providers must communicate clearly, promptly, and repeatedly with both retail and institutional clients regarding their wind-down plans, including deadlines for transferring or closing positions.
The regulator noted that firms should inform customers about any automatic position closures and explain what protections, or lack thereof, apply during the transition process.
AML and compliance obligations remain in force
Even while exiting the market, crypto firms are expected to maintain full compliance with anti-money laundering (AML) and counter-terrorism financing requirements.
ESMA stressed that customer due diligence, transaction monitoring, sanctions screening, suspicious activity reporting, record-keeping obligations, and crypto transfer traceability requirements must continue throughout the wind-down period.
The regulator also emphasized that when clients are transferred to a MiCA-authorized provider, the receiving firm must conduct all necessary onboarding and AML checks before accepting those customers.
Warning issued to offshore crypto firms
The statement also serves as a reminder to non-EU crypto firms that they are prohibited from actively providing MiCA-regulated services to EU residents. ESMA reiterated that crypto companies based outside the bloc cannot target European customers unless services are provided strictly under the narrow “reverse solicitation” exemption, where the client initiates contact entirely on their own.
The regulator further warned that MiCA prevents licensed providers from outsourcing critical services, including custody functions, to firms that are not authorized CASPs.
Consumers urged to verify providers
Alongside its warning to firms, ESMA urged crypto users to verify whether their provider holds MiCA authorization through the official ESMA register. The regulator cautioned that clients using unauthorized crypto platforms do not benefit from MiCA’s investor protection framework, including safeguards related to custody and asset protection.
Consumers were encouraged to transfer assets either to a MiCA-authorized provider or to a self-custody wallet if their current platform fails to obtain authorization before the deadline.
MiCA deadline nears
As the July 1 deadline for the end of MiCA’s transitional period approaches, regulatory scrutiny of crypto firms operating in the EU is increasing. The focus intensified after ESMA’s June 23 warning directing unauthorized crypto firms to begin winding down EU operations if they fail to secure MiCA authorization. Firms were instructed to stop onboarding new customers, halt marketing activities, and assist users with transferring or closing positions.
At the same time, authorized firms are moving to expand. Ripple recently secured MiCA approval in Europe, allowing institutions to access its payments infrastructure and RLUSD stablecoin services under a unified regulatory framework.
ESMA confirmed that it is working closely with national regulators, the European Banking Authority (EBA), and the Anti-Money Laundering Authority (AMLA) to monitor compliance as the transition period ends.
The regulator indicated that coordinated enforcement actions may be taken against significant unauthorized crypto firms that continue servicing European customers after July 1.
With MiCA now entering its full implementation phase, the latest warning signals that European regulators are preparing to enforce one of the world’s most comprehensive crypto regulatory frameworks, placing increasing pressure on firms that have yet to secure authorization.
Also read: EU Parliament Committee Backs Digital Euro Bill After Key Vote Approval
