With the transitional period under the Markets in Crypto Assets Regulation (MiCA) ending on 30 June 2026, crypto firms face a pivotal moment. A literal reading of the law would suggest the choice is binary – either secure a licence or cease trading from 1 July 2026. However, as is customary with an industry renowned for innovation, solutions are emerging that could be compliant with applicable regulations, providing a lifeline to those who are yet to secure their licence.

Published: 29 June 2026
Authors: Manoj Peiris

Background

MiCA entered into force in 2023. One of the key elements was the provision of a transitional period for those acting as a Crypto Asset Service Provider (CASP) prior to December 2024 to transition from compliance with the existing regulatory framework, to compliance with MiCA. Member States were afforded the discretion to shorten the transitional period if their existing framework was at the minimum, comparable to the requirements of MiCA. However, the transitional period for all Member States ends on 30 June 2026.

The impact of the transition to compliance with MiCA is stark. Prior to MiCA, there were in excess of 1,000 Virtual Asset Service Providers (VASPs) registered under local Member State VASP regulation. As present, there are only around 200 licenced companies appearing on the European Securities and Markets Authority (ESMA) register holding some form of MiCA CASP licence.

This suggests an intentional strategy by the European Commission and National Competent Authorities (NCAs) to raise standards for organisational oversight and accountability, in the interests of protecting EU consumers and the wider reputation of financial and technological service provision in the EU.

Impact

As the transitional period was not unified across the EU, VASPs have faced challenges not of their own making. As is often the case with regulation implemented across a trading bloc, unforeseen issues arise - here, many VASPs that have advocated for clear regulation have struggled to secure MiCA CASP licences for a variety of reasons beyond their control.

Solutions

As expected for an industry built on innovation, possible solutions are emerging for those VASPs facing a cliff edge on 30 June. One such solution is partnering with an entity that is MiCA CASP licensed to leverage that entity’s regulatory permissions for the provision of digital asset services.

The key to such partnership will be ensuring the contractual framework does not expose either the licensed CASP, or the former VASP, to claims of breaching MiCA. The user experience might not be seamless, with the CASP potentially performing Know Your Customer (KYC) checks in addition to what was previously undertaken by the VASP. However this is a worthwhile trade-off – enabling the VASP to continue to operate from 1 July until such time as they secure their own MiCA CASP licence.

We’re supporting clients through the MiCA transition—please get in touch if you’d like to discuss what this means for your business.