ESMA Statement On MiCA Transitional Periods

In December 2025, theEuropean Securities and Markets Authority (ESMA)issued an important statement addressing the impending conclusion of the transitional periods under theMarkets in Crypto-Assets Regulation (MiCA).The Statement provides clarity to crypto-asset service providers ('CASPs'), national competent authorities ('NCA'), and market participants as Member State-level transitional regimes come to an end, bringing the sector fully under the harmonized MiCA framework.

Divergent Transitional Periods Across the EU

MiCA introduced temporary rules for crypto-asset service providers (CASPs) that were already offering services under national rules before 30 December 2024. From that date onwards, newly established CASPs must obtain authorisation under MiCA to operate. Existing providers, however, may continue their activities for a limited transitional period. The duration of this period is determined by each EU Member State, resulting in differing timelines across the Union.

Several Member States have already concluded their transitional periods, while others will do so in the coming months. ESMA's statement aims to promote greater consistency and enhance investor protection as these varying timelines progress toward the full application of MiCA requirements.

ESMA's Expectations for CASPs Approaching the Deadline

ESMA emphasises that crypto-asset service providers (CASPs) still operating under transitional arrangements must now prepare orderly wind-down plans if they have not secured MiCA authorisation. These plans should ensure that services are brought to an end without causing unnecessary harm to clients and must set out clear steps for transferring or withdrawing clients' crypto-assets where required.

ESMA also warns firms not to submit last-minute authorisation applications in the hope of being treated more favourably. National competent authorities (NCAs) are instructed to assess all applications thoroughly and, where appropriate, to require firms to suspend their crypto-asset services until the authorisation process is completed.

Investor Protection

To support market transparency, ESMA reiterates that only CASPs included in the Interim MiCA Register, or otherwise authorised at national level, should be treated as compliance service providers. Investors are urged to verify the regulatory status of firms they engage with, particularly during this transitional phase when some providers may be winding down operations.

ESMA's guidance underscores the importance of preventing regulatory arbitrage. The Authority expresses concern that differing national timeliness could expose consumers to varying levels of protection if CASPs continue cross-border activities without the requisite authorisation. The insistence on orderly wind-down measures aims to mitigate this risk.

What Industry Stakeholders Should Do Next

For CASPs:

• Finalise and implement wind-down plans where authorisation is unlikely to be obtained in time. This applies when a CASP is not expected to receive MiCA authorisation before its transitional period ends. In that case, the firm must prepare to stop its services in an orderly way.

• Engage proactively with NCAs to understand jurisdiction-specific timelines and expectations.

• Ensure clients are informed appropriately and that asset transfer mechanismis in place. Clients should receive clear and timely updates about any changes to the firm's services. They must also be told what actions they need to take to transfer or withdraw their crypto-assets.

For cross-border CASPs:

• Assess authorisation requirements across all relevant Member States to avoid any instance of non-compliance in any jurisdiction.

• Review operational arrangements to ensure continued compliance once transitional protections lapse.

For stakeholders:

• Verify the regulatory status of CASPs via the ESMA Interim MiCA Register or national registers.

• Exercise caution with providers not clearly authorised or nearing the end of transitional permissions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.