A major regulatory deadline in Europe now forces crypto companies and their users into urgent decisions, with authorities warning that access to services could change within weeks.
The European Securities and Markets Authority confirmed that the transitional period under the Markets in Crypto-Assets Regulation will end on July 1, 2026. After that date, firms without authorization will no longer be allowed to serve EU customers. ESMA stated that any entity that continues to operate without a license “will be in breach of EU law and must cease offering such services.”
This cutoff follows several earlier notices from the regulator, which stressed the need for timely authorization and strong client protection measures. The final stage now requires action from both companies and users.
Most existing firms face loss of status
The scale of the transition remains significant. Hogan Lovells reported that more than 3,000 crypto firms operated under national regimes in 2024. By May 2026, only 194 had secured authorization under MiCA, including banks.
The firm expects about 75% of pre-MiCA providers to lose their right to operate once the transition ends.
The gap between registrations and licenses has left many firms without a path to continue operations. Since the approval process requires months of regulatory review, companies that have not yet secured a license now face limited options.
Regulators demand orderly exits
ESMA has instructed unlicensed providers to prepare shutdown plans in advance. These plans must allow an orderly exit and protect clients from financial harm.
The regulator expects firms to arrange transfers of customer assets to authorized providers or to self-hosted wallets. It also requires firms to notify users before any action takes place.
“Wind-down plans enable an orderly exit without causing undue economic harm to clients,” ESMA stated in its April communication.
By the July deadline, any firm without approval must already have implemented its exit plan. Authorities also expect licensed firms to take an active role in onboarding clients from unlicensed competitors before the cutoff.
Users begin to feel the impact
The effects of the deadline have started to appear across the market. Some platforms have restricted new deposits, while others have asked users to withdraw funds or accept new account terms.
Clients who move to licensed entities often face additional identity checks. EU rules require full compliance with anti-money laundering standards, which has led to repeated verification requests.
Users also need to confirm which legal entity holds their account. ESMA warned that protections apply only to the authorized EU entity, not to other companies under the same brand.
“Know exactly who you are dealing with,” the regulator stated, and urged investors to review contracts carefully.
60% of European crypto users still rely on platforms without MiCA authorization. The data showed that 7.6 million of 18.5 million exchange app downloads in Europe between May 2025 and May 2026 came from unlicensed platforms.
Enforcement measures intensify across countries
National regulators have begun to outline enforcement strategies. In France, the Autorité des marchés financiers issued one of the strongest warnings. The regulator stated that only authorized providers can serve clients after July 1.
Firms that continue operations without approval face criminal penalties. French law allows for a prison sentence of up to two years and a €30,000 fine. Authorities can also publish blacklists and request court orders to block websites.
Reuters reported that AMF president Marie-Anne Barbat-Layani told reporters it was “very, very urgent” for companies to complete their applications.
Other countries have taken different approaches. Italy introduced earlier local deadlines for firms to apply or exit, while Poland has faced delays in passing MiCA-aligned legislation. These differences have created uneven progress across the EU.
Market structure enters a critical phase
MiCA introduces a passporting system that allows licensed firms to operate across all 27 EU member states. A single approval can grant access to the entire market, but only if regulators apply consistent standards.
This system now faces its first major test. Approval timelines vary between countries, and some regulators have raised concerns about uneven oversight.
France has indicated that it may scrutinize licenses issued by other jurisdictions if it identifies risks. Officials have warned that weak approvals could undermine the broader framework.
Immediate choices for investors
For users, the next steps remain practical. Accounts held with licensed providers should continue without interruption. Accounts tied to unlicensed firms may face closures, transfers, or forced withdrawals.
ESMA has urged investors to verify providers through the official register and act before the deadline if necessary. The regulator also warned that staying with an unauthorized firm may result in reduced legal protection and a higher risk of losing access to assets.
The coming weeks will determine how smoothly the transition unfolds. Companies must complete licensing or exit the market. Users must decide whether to move funds or remain with their current providers.
The July 1 deadline will mark the first full enforcement of MiCA rules across the European Union. Its early impact will shape the structure of the region’s crypto market and define how regulation affects both access and competition.
Matvii Diadkov
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