ESMA urges unauthorized crypto-asset service providers to orderly cease operations as the MiCA transitional period concludes on July 1.
By Ian Allison|Edited by Sheldon RebackUpdated Jun 29, 2026, 10:14 a.m. Published Jun 29, 2026, 10:01 a.m. 5 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on ESMA headquarters in Paris. (Gecina/Wikimedia Commons)SummaryShow- Approximately 80% of crypto firms in Europe may lose their registration and face potential closure.
- In 2024, Europe was estimated to have over 3,000 registered virtual asset service providers (VASPs), with Poland accounting for more than 1,400.
- Only around 230 firms are currently authorized under MiCA.
European cryptocurrency firms that have not secured a Markets in Crypto Assets (MiCA) license are facing a critical deadline this week that could drastically reduce their presence in the market.
Companies that were licensed by national authorities before MiCA's implementation—a regulatory framework designed to standardize operations for crypto firms across the 27 EU nations—can only continue to operate until the transitional period ends on July 1, after which their licenses will expire.
As of 2024, it was believed that there were more than 3,000 registered VASPs in Europe, with Poland alone being home to over 1,400 registrations. Currently, only 244 firms have received MiCA authorization.
“I predict that 80% of the crypto businesses will not survive after MiCA,” stated Erald Ghoos, CEO of OKX Europe, in an interview. “This is not only due to MiCA itself but also because of the extensive regulatory framework in Europe. Obtaining a MiCA license to offer stablecoin services also necessitates a Payment Institution (PI) or Electronic Money Institution (EMI) license.”
Some firms have even inquired whether OXK, which secured a MiCA license from Malta over a year ago, would consider acquiring them due to their inability to handle compliance costs, he noted.
Adhering to Regulations
The MiCA regulations commenced on June 30, 2024, starting with rules for stablecoins, while the complete set of regulations took effect six months later. Firms with prior registrations were allowed to continue operating until July 1 this year. MiCA licenses, granted by national authorities, enable companies to operate throughout the European Economic Area (EEA), which includes the 27 EU nations as well as Norway, Iceland, and Liechtenstein.
The European Securities and Markets Authority (ESMA), the EU's financial regulatory body, has already urged unauthorized crypto-asset service providers to wind down their operations in a structured way, prioritizing client interests, as the MiCA transitional period concludes.
This situation illustrates the essence of regulation: MiCA has elevated compliance standards and will likely eliminate firms that do not meet these requirements. However, there are concerns that the costs associated with compliance are making it difficult for smaller firms to survive, thereby hindering innovation.
The costs for MiCA compliance vary based on the firm’s size, and additional licenses, such as an EMI license for processing payments across the EEA, may contribute to overall expenses. The capital required for a MiCA license is relatively modest, ranging from 50,000 euros ($57,000) to 150,000 euros depending on the class, as per Patrick Gruhn, founder and CEO of Perpetuals.com Ltd. (PDC).
However, the actual cost of obtaining a license can be significant, potentially reaching up to 700,000 euros in the first year and 250,000 euros annually thereafter for smaller firms, while larger exchanges could incur costs in the millions, Gruhn noted via email. “It typically takes 12 to 24 months to facilitate the first authorized trade, along with potential lawyer fees of around €100k,” he added.
While there is no precise estimate for job losses due to MiCA, many of the 80% of pre-MiCA platforms facing shutdown are likely to be small, non-operational entities, Gruhn indicated.
“That significantly exaggerates the situation,” Gruhn remarked. “Much of the impact will be a reallocation of resources, as licensed firms will need to hire compliance personnel, unlike the offshore entities.”
Shifting Landscape
Nonetheless, MiCA poses a risk of stunting the growth of the crypto industry in certain regions. The situation is particularly severe in Poland, where legislative delays and presidential vetoes have hindered the Polish Financial Supervision Authority (KNF) from establishing a comprehensive crypto application and licensing framework.
Mateusz Kara, CEO of Morphic Financial Group, based in London with significant operations in Poland, expressed concerns that the MiCA deadline could “decimate Polish crypto.”
“It will significantly alter the landscape for crypto entities,” Kara commented in an email. “Currently, there are about 2,000 VASP entities in Poland. To my knowledge, we are the only ones with a MiCA license. Therefore, you can imagine how many firms will have to cease operations starting in the latter half of this year.”
Kara anticipated that the outcome would be a lack of space for smaller crypto companies and difficulty for new ones to emerge in the market.
“In my view, the European market will be dominated by larger players, and we are already witnessing this trend,” he remarked.
Despite ESMA's guidance and insights from industry experts, the post-deadline scenario remains uncertain. Even crypto regulation specialists at the law firm Hogan Lovells, co-authors of a report on the MiCA transition, express varying opinions on the potential for leniency moving forward.
“None of us can predict the future,” stated John Salmon, a partner at the firm who has been involved in crypto since its inception. He pointed out the diverse approaches among the 27 EU countries, some of which have been slow to implement their regulations.
“Given the current circumstances, it seems unlikely that regulators will adopt an excessively harsh stance, but we cannot be sure. Each country is likely to take a different approach,” Salmon noted in an interview.
Jeffrey Greenbaum, a partner at Hogan Lovells and co-author of the report, referenced a joint initiative last year by financial regulators from France, Austria, and Italy that called for ESMA to exert tighter control over member states' implementation of MiCA.
“Smaller financial centers like Luxembourg and Dublin are keen to maintain their market positions,” Greenbaum mentioned in an interview. “Conversely, some regulators are dissatisfied with the outcomes in Malta and Cyprus. Therefore, we have a general understanding of which regulators may be lenient, as they have to be, and those likely to adopt a stricter stance.”
Lavan Thasarathakumar, a senior adviser at Hogan Lovells, indicated that a firm approach from regulators is anticipated following the July 1 deadline.
“Any regulator, jurisdiction, or member state allowing firms to continue operating under existing national laws would be considered in violation of EU regulations,” Thasarathakumar stated in an interview.
An alternative for smaller firms was recently proposed by crypto custody company BitGo. BitGo Europe, authorized by Germany's BaFin regulator, announced that companies could transfer their clients’ wallets into its regulated custody as a solution to the burdens of MiCA compliance.
CEO Mike Belshe remarked that the looming elimination of crypto firms in Europe, with only a 17% compliance conversion rate to MiCA, “seems like a setback,” especially in light of increasing institutional interest in Europe and plans for a regulated euro stablecoin.
“With less than 250 authorized service providers, European users will likely bear the brunt of the end of this transitional phase,” Belshe stated via email.
UPDATE (June 29, 10:13 UTC): Updates number of MiCA approved companies in third paragraph.
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