Panayiotis Rougalas
Those who made it in time made it in time to transition into the new era of crypto-asset markets, which brings stricter regulations and fair application of the upgraded guidelines. This past Wednesday, July 1, the European Union tightened the reins on crypto-asset service providers (CASPs) as the final transitional period in the EU under regulation 143(3) for crypto expired. Practically, from July 1, the European crypto market distanced itself from national transitional registrations, shifting toward a regime where these companies will operate only under a single denominator of MiCA guidelines (Markets in Crypto-Assets Regulation). Thus, from that day on, any exchange that wants to have clients within the EU must possess a MiCA (CASP) license. Those who do not will not be able to legally offer services to Europeans.
Any company that continues to operate based on the old national crypto-asset service provider (CASP) registration of the Cyprus Securities and Exchange Commission (CySEC), without possessing a full operating license under the MiCA regulation, is violating EU law. Referring to the MiCA directive, unauthorized CASPs after July 1 were forced to immediately stop onboarding new clients in the EU, refrain from opening new relationships or accounts with clients, and stop marketing activities and client solicitation. At the same time, as supervisors stated, these companies must limit the provision of services to actions necessary for selling or transferring cryptocurrencies, reallocating assets, or closing positions.
Ten days prior to July 1, the Minister of Finance, Makis Keravnos, during his speech at the annual general assembly of the Association of Banks for 2026, stated that, "the effective implementation of the Markets in Crypto-Assets (MiCA) Regulation is a fundamental prerequisite for ensuring the smooth functioning of the market, enhancing transparency, trust, transaction security, and the effective supervision of the sector."
Quite a few stopped
Prior to the implementation of the directive, out of more than 1,200 companies that held pre-MiCA national registrations across the EU, only about 210 had secured a full CASP license, a transition rate that translates to less than 18%. The deadline for submitting applications to CySEC expired last February, and companies that did not meet it were required to submit a plan for the phased termination of their activities.
Revolut is among those that succeeded, securing the MiCA license from CySEC. For the rest, the options are set: acquiring a license, discontinuing client service, merging, or ceasing operations. Thus, the market that took shape as of this week will be smaller, more centralized, and will present significantly higher barriers to entry.
By the book
Referring to the guidelines of the implementation, supervisors clarified that the custody of clients' cryptocurrencies can continue only for the period absolutely necessary to complete a smooth exit. Companies were required to communicate clearly, quickly, and repeatedly with clients regarding the measures taken to protect their assets and the liquidation plans, so that clients were aware of the timeline for the sale, transfer, reallocation, or closing of their positions. CASP announcements should have included a deadline within which any remaining positions would close automatically, as well as information regarding client protection requirements.
ESMA has explicitly stressed that liquidation arrangements should be applied in accordance with all relevant EU or national conduct-of-business laws. Specifically, crypto providers (CASPs) must maintain effective controls throughout the liquidation process, including customer due diligence measures, transaction monitoring, screening for restrictive measures and sanctions lists, reporting suspicious transactions and activities, record-keeping requirements, and compliance.
They transferred assets
In the preceding period, clients transferred their assets to exchanges holding a MiCA license. When clients are transferred to a MiCA-authorized CASP, the incorporating CASP must carry out all necessary onboarding procedures, including customer due diligence and any other anti-money laundering AML/CFT checks required under the applicable legal framework. ESMA and National Competent Authorities (NCAs) are working directly with the involved entities and will coordinate to monitor whether significant unauthorized cross-border CASPs are shutting down without delay, focusing on client protection, financial stability, and market integrity. Supervisors from ESMA and the NCAs are also cooperating with the European Banking Authority (EBA) and the new European Anti-Money Laundering Authority (AMLA).
