EU regulator orders unlicensed crypto firms to wind down

The European Securities and Markets Authority has ordered all unlicensed crypto firms operating in the European Union to begin winding down their services immediately, ahead of a July 1 deadline for full compliance with the bloc's new regulatory framework. The directive mandates that unauthorized crypto-asset service providers cease onboarding new clients and marketing their services, shifting their operations solely to facilitating customer exits.

The regulator issued the formal guidance on Tuesday, June 23, emphasizing the need for an orderly transition as the grace period for the Markets in Crypto-Assets Regulation concludes. Under the new rules, only firms authorized under MiCA will be permitted to offer services like trading, custody, and exchange of cryptocurrencies within the EU's 27 member states. ESMA stated that unauthorized firms must now limit their activities to actions necessary for clients to exit safely, such as selling or transferring assets, reallocating holdings, or closing open positions.

Firms are required to communicate clearly and repeatedly with clients about their wind-down plans, providing timelines for asset disposal and explaining the measures being...