The European Securities and Markets Authority (ESMA) urges unauthorised cryptoasset service providers to cease operations in an orderly manner, while protecting the interests of clients, ahead of the end of the transitional period of MiCA.
ESMA issues this statement to clarify expectations on how unauthorised cryptoasset service providers (CASPs) must reduce their activities, while protecting investors after the end of the transitional period under the Markets in Crypto-assets Regulation (MiCA) on 1 July 2026.
Although some CASPs will have obtained authorisation before 1 July 2026, other entities, including significant providers currently serving clients in the European Union (EU) under national regimes, may not be authorised before the deadline.
ESMA expects unauthorised CASPs to take immediate action to cease their activities in the EU in an orderly manner, while protecting the interests of clients and mitigating risks to market integrity. In particular, unauthorised CASPs must:
- Immediately, stop onboarding new clients from the EU, refrain from initiating new relationships or accounts with them, and cease advertising and soliciting clients.
- Limit the provision of services to those necessary for selling or transferring cryptoassets, reallocating assets or closing positions. Custody of clients' cryptoassets may only continue for the strictly necessary period to complete an orderly exit.
- Clearly, promptly, and repeatedly communicate to clients (retail and institutional) the measures taken to protect their assets and the winding-down plans, so that clients are aware of the timeframe to unwind, transfer, reallocate, or close their positions. Communications from CASPs should include the timeframe in which clients' residual positions will be closed and information about client protection requirements.
Arrangements for the winding-down process must be implemented in compliance with all relevant EU or national conduct laws and AML/CFT obligations. In particular, CASPs must maintain effective AML/CFT controls throughout the winding-down process, including client due diligence measures, transaction monitoring, review of restrictive measures and sanctions lists, reporting of transactions and suspicious activities, registration requirements, and compliance with applicable obligations for funds transfers and traceability of cryptoasset transfers. ESMA expects unauthorised CASPs to act diligently and with due care to protect clients.
When clients are transferred to a MiCA-authorised CASP, the onboarding CASP must carry out all necessary onboarding procedures, including client due diligence and any other AML/CFT scope checks required under the applicable legal framework.
ESMA also reminds CASPs established outside the EU that they cannot provide MiCA services to EU clients or solicit EU clients. This also applies in a business context with other entities. In this regard, the
ESMA reminds that MiCA prohibits CASPs from subcontracting or delegating certain services, especially custody, to entities that are not authorised as CASPs.
