The European Securities and Markets Authority (ESMA) has issued a statement to clarify supervisory expectations regarding the end of the transitional period(s) under the Markets in Crypto-Assets Regulation ((EU) 2023/1114 (MiCA)).

The MiCA transitional period will officially expire across the EU on 1 July 2026. After this date, any entity providing crypto-asset services to EU clients without a MiCA licence will be in breach of EU law and must cease offering such services.

ESMA expects that:

• Wind-down plans enable an orderly exit without causing undue economic harm to clients, including by arranging the offboarding of clients – for example by organising the transfer of crypto-assets held on their behalf to an authorised CASP or to a self- hosted wallet. CASPs should provide existing clients with prior notice before implementing the wind-down plan. Plans should be operational, credible, and immediately executable and designed in accordance with all relevant EU conduct, prudential and AML/CFT obligations.
• By 1 July 2026, when the transitional period ends across the EU, any unauthorised CASP must have implemented its wind-down plan.

ESMA also expects authorised CASPs to actively manage the migration of existing clients ahead of 1 July 2026. In particular, authorised CASPs should take the necessary steps to onboard existing EU clients before the end of the transitional period. In doing so, ESMA expects authorised CASPs to apply robust onboarding processes to ensure full compliance with applicable AML/CFT requirements.

In this context, ESMA reminds market participants that entities established outside the EU are, outside the narrow exception of reverse solicitation, not permitted to provide crypto- asset services that qualify as MiCA services to EU investors or to solicit EU clients with a view to provide MiCA services to them.

This also applies in a business-to- business context, as MiCA specifically prohibits CASPs from outsourcing or delegating certain services, namely custody, to entities not authorised as CASPs themselves.

ESMA warned investors engaging with crypto assets that not all providers are authorised under MiCA after 1 July 2026, and that their protections depend on who they are dealing with.