Thousands of crypto firms could lose permission to operate in the European Union when the final MiCA transition period ends on July 1, 2026.
An analysis from international law firm Hogan Lovells estimates that up to 75% of firms registered under older national systems may lose their status. Still, the figure remains an estimate rather than a confirmed number of company exits.
More than 3,000 virtual asset service providers operated across Europe before the Markets in Crypto-Assets regulation took full effect. By May 2026, only 194 firms had secured authorization as crypto-asset service providers.
The difference has raised questions about how many applications regulators can approve before the deadline and how many firms have already decided to leave the market.
MiCA created one set of operating rules for crypto exchanges, brokers, custodians and other service providers across the EU. Firms licensed in one member state can use the passporting system to serve customers across all 27 countries.
Until July 1, some companies can still operate through national registration arrangements. After the deadline, providers without MiCA authorization must stop offering regulated crypto services to EU customers.
The European Securities and Markets Authority has told unlicensed firms to prepare orderly closure plans. These plans should cover customer notices, asset withdrawals and transfers to approved platforms or self-hosted wallets.
ESMA has also warned that protection under MiCA only applies when customers deal with an authorized EU company. A global platform may use the same brand across several regions, but its non-EU entities do not automatically receive MiCA approval.
Hogan Lovells said around 75% of firms registered before MiCA ‘could’ lose their status. The wording shows that the final number remains uncertain as applications, withdrawals, and approvals are still moving through national systems.
The firm described MiCA as a market filter as well as a common regulatory framework. Companies must meet rules covering governance, capital, client asset protection, anti-money laundering controls and ongoing supervision.
Smaller firms may face greater difficulty meeting these requirements. Larger companies often have more staff and funding available for legal reviews, reporting systems and compliance controls.
Hogan Lovells also raised the possibility of a ‘consumer protection paradox.’ The firm questioned whether fewer authorized providers may drive some customers toward offshore platforms that operate beyond EU oversight.
That concern does not confirm that users will leave regulated services. It shows uncertainty over how customers may respond when platforms close accounts, change legal entities or restrict access.
National regulators have started moving from guidance toward enforcement. Italy’s CONSOB has ordered some unauthorized crypto services to stop operating and has acted against offerings that did not meet disclosure rules.
France’s financial regulator has warned that only authorized providers can serve French customers after July 1. Under French rules, firms that operate without approval may face fines, website restrictions and criminal penalties.
Austria’s Financial Market Authority has also joined calls for closer cooperation between national supervisors. Regulators want to limit gaps that could allow firms to seek approval in countries seen as having faster or less demanding reviews.
Questions about consistency grew after an ESMA review of Malta’s financial regulator. The review recognized its experience but questioned whether some risks received enough attention during licensing checks.
EU officials are also discussing a larger supervisory role for ESMA. A more central system could place major crypto firms under direct EU-level oversight rather than separate national regulators.
For customers, the position will depend on the platform. Users may need to accept new terms, complete identity checks again, withdraw assets, or transfer funds to an authorized company before access changes.
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