MiCA grandfathering expiry leaves many crypto firms outside EU regime

The expiry of MiCA transitional relief has ended national grandfathering for crypto-asset service providers across the European Union and European Economic Area, according to Fintech Wrap Up founder Sam Boboev in an external Finextra opinion post. Boboev said about 200 to 213 platforms had moved from more than 1,200 legacy national VASP registrations to full CASP status by the close of the window, implying a conversion rate below 18%.

The change concerns Article 143(3) of the Markets in Crypto-Assets Regulation, which allowed firms already registered under national virtual asset service provider regimes to continue operating for a limited period while seeking authorisation under the new EU framework. With that period now closed, Boboev said firms serving EU clients without MiCA authorisation are in breach of EU law.

From national registrations to a single regime

Before MiCA took full effect for these firms, crypto businesses operated under national VASP systems that differed across member states. Boboev said the transitional periods were uneven, with France, Malta and Luxembourg using an 18-month window ending on July 1, 2026, while other jurisdictions imposed shorter timetables.

That sequencing created compliance gaps for firms that served customers across borders, according to Boboev. A platform relying on a longer transition in one jurisdiction could face enforcement issues in another state where the relief had already expired, leading in some cases to local restrictions and geofencing.

MiCA replaces that patchwork with a harmonised authorisation model for crypto-asset service providers, known as CASPs. Under the framework described by Boboev, a firm authorised as a CASP can operate under the EU regime rather than relying on separate national VASP registrations.

Penalties and wind-down obligations

Boboev cited MiCA Article 111 as giving national competent authorities power to impose administrative fines on legal entities of as much as €5 million or up to 12.5% of total annual turnover. He also said unauthorised platforms face wind-down requirements, including stopping new customer onboarding, ending marketing and solicitation, and limiting services to withdrawals, transfers, liquidations and account closures.

For institutional users and corporate counterparties, Boboev said the end of transitional relief raises operational concerns around custody, withdrawals and legal treatment. He said unlicensed platforms may lack guaranteed segregation of client assets, which could expose customers to pooling of funds in an insolvency process.

Boboev said treasurers and institutional allocators are checking counterparties against the European Securities and Markets Authority register to confirm whether platforms are authorised. That register functions as a reference point for market participants seeking to identify firms permitted to provide services under the EU regime.

Compliance focus shifts to controls

In the Finextra post, Boboev said firms seeking to operate in the region should review counterparties, build pre-transfer checks into transaction systems and align security testing with DORA-style risk processes. He also said businesses planning EU expansion need either Article 63 authorisation or a partnership with an already licensed CASP.

Finextra identifies the post as external content provided without editing and as reflecting the author’s views. The assessment points to a sharper divide in Europe’s crypto market between authorised providers and firms that must limit activity or exit regulated service lines.

This story draws on original reporting from Finextra Research.