On 19 December 2024, the European Securities and Markets Authority (ESMA) issued a statement regarding the transitional regime for crypto asset service providers (CASPs) under Article 143(3) of the Regulation in markets in crypto assets (MiCAR).

Article 143(3) of the MiCAR states that “Crypto-asset service providers that provided their services in accordance with applicable law before 30 December 2024, may continue to do so until 1 July 2026 or until they are granted or refused an authorisation pursuant to Article 63, whichever is sooner.”

Member States have complete discretion not to apply this transitional regime or to reduce its duration in view of fostering financial stability and investor protection. As such CASPs will face different transitional periods depending on the Member State or Member States in which they are active. ESMA has collected an overview of the length of transitional regimes per Member State which can be found at: List of grandfathering periods decided by Member States under MiCAR.

The statement reminds CASPs that the different transitional periods should be taken into account when providing services in more than one Member State when they transition to MiCAR. The statement also reminds CASPs of the communication that ESMA published in October 2023 which raised the possible challenges of MiCAR’s transitional regime. The communication also called for market participants to apply for a MiCAR authorisation as soon as possible, reminding them that without a MiCAR authorisation they would not benefit from passporting rights within the EU during the transitional period.

Member State competent authorities (NCA) are reminded that they should ensure that they are fully aware of the activities of CASPs outside the Home Member State and possible implications on the cross-border provision of services in Host Member States. The Home NCA should engage in early and continuous dialogue with relevant Host NCAs to mitigate disruptions.