ESMA enforces crypto crackdown as MiCA transition ends on 1 July

The European Securities and Markets Authority (ESMA) has ordered unauthorised crypto-asset service providers to begin an orderly wind-down as the MiCA transitional period ends on 1 July. This deadline marks a significant shift for Europe’s crypto market, with authorised firms allowed to continue serving EU clients while unauthorised ones must halt new business. From 1 July, unauthorised crypto firms must stop onboarding new EU clients. They must also cease opening accounts, marketing, or any solicitation activity, including in business-to-business deals. Non-EU firms without approval cannot provide MiCA services to EU clients or seek their business.

ESMA requires these firms to limit their services to actions that help clients exit safely. This includes selling or transferring crypto-assets, reallocating holdings, or closing open positions. Custody services may continue only as long as necessary to complete the exit process and must not be used to extend unauthorised operations.

Firms must comply with EU and national conduct rules, as well as anti-money laundering and counter-terrorist financing obligations. They must also clearly and repeatedly communicate wind-down plans to clients, outlining timelines for disposing of, transferring, or closing positions. ESMA added that firms must explain client protection measures and how assets will be safeguarded during the transition.

Meanwhile, Ripple has secured preliminary approval for a Crypto Asset Service Provider licence in Luxembourg. This would allow it to offer stablecoin payment services to European companies and expand into broader crypto functions under MiCA. The 1 July deadline enforces strict rules on unauthorised firms, restricting them to exit-only activities. Authorised providers, like Ripple, can now move forward under the new regulatory framework. Clients of unauthorised firms will see their positions closed or transferred as part of the mandatory wind-down process.