EU anti-money-laundering watchdog is raising the alarm about a potential compliance squeeze in the wake of MiCA’s transitional deadline — warning that a mass migration of customers to licensed providers could strain anti-money-laundering controls across the bloc.
What happened
On July 1 the EU’s 18-month Markets in Crypto-Assets (MiCA) transitional period ended, meaning crypto-asset service providers (CASPs) must be authorized to keep operating in the EU. Firms that missed the deadline were told by the European Securities and Markets Authority (ESMA) to begin winding down EU business, setting up a wave of customer transfers to licensed rivals.
Why regulators are concerned
Bruna Szego, chair of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), told MEPs that this forced migration could produce two linked risks:
- Crypto firms exiting the market may trigger surges of withdrawal and transfer requests as users pull assets before services end.
- Licensed CASPs/VASPs absorbing those customers could find themselves onboarding large cohorts quickly, increasing the risk that pressure to accept new users weakens AML controls.
AMLA issued advisory guidance before July 1 laying out expectations for both firms closing EU operations and licensed providers taking on new clients, emphasizing that AML procedures must remain effective throughout the migration.
Supervisory follow-up
AMLA said it will publish a sector-wide report by year-end assessing money-laundering risks in crypto and surveying supervisory practices used by national authorities. The authority is also scaling up blockchain analytics capabilities to improve oversight and plans to compare how different member states supervise CASPs — flagging areas that may need coordinated follow-up between AMLA and national regulators.
ESMA’s checks already under way
Regulators are moving from licensing to active supervision. On July 11 ESMA launched a Common Supervisory Action targeting a sample of MiCA-authorized crypto custodians to test operational resilience in practice — focusing on private key management, transaction controls, incident response, and reliance on third-party tech providers. The aim is to see whether firms can deliver the operational safeguards their MiCA approvals imply, not just on paper.
What this means for the market
The end of the transitional period marks a new, risk-focused phase for EU crypto oversight. Firms that are closing shop must manage customer exits without creating AML gaps, while licensed providers face the dual challenge of scaling onboarding safely and maintaining robust controls. Watch for AMLA’s year-end report and ESMA’s supervisory findings for signals on where enforcement and coordinated action may intensify next.
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