Europe’s crypto regulatory landscape enters a decisive phase as MiCA transitional periods end and supervision tightens. This issue highlights key licensing deadlines, ESMA guidance, supervisory actions, and policy signals shaping how crypto-asset service providers operate in 2026 and beyond.
Lithuania’s MiCA Transitional Period for VASPs Ends on 31 December 2025
On 10 December 2025, the Financial Crime Investigation Service (FCIS) reminded crypto-asset service providers (VASPs) that Lithuania’s MiCA transitional period will expire on 31 December 2025. From 1 January 2026, all VASPs must hold a MiCA-compliant licence to operate legally. Entities continuing operations without a licence will be in breach of the law, and registration data for unlicensed VASPs will be removed from the Register of Legal Entities from 2 January 2026. FCIS emphasised that entities ceasing operations must retain AML/CFT records for statutory periods, continue reporting suspicious and large transactions, and appoint responsible contact persons for international cooperation. Operating without a licence may result in criminal liability, including fines, restrictions on liberty, or imprisonment. Compliance steps include confirming licenced status by the deadline and implementing winding-down procedures with proper record retention and reporting.
ESMA Clarifies Execution of Crypto-Asset Orders Outside MiCA-Authorised Platforms
On 8 December 2025, ESMA published guidance clarifying that, under Article 78(5) of the MiCA Regulation, a “trading platform” refers only to MiCA-authorised crypto-asset trading platforms. Execution of client orders through alternative arrangements—such as over-the-counter trades, third-country venues, or decentralised exchanges—is considered outside a MiCA-authorised platform. Crypto-asset service providers (CASPs) permitting such execution must inform clients and obtain prior express consent, either generally or on a per-transaction basis, reflecting the lower investor protection and differing regulatory standards outside authorised platforms.
EU Commissioner Highlights Blockchain as Core Financial Infrastructure
In December 2025, Maria Luís Albuquerque, European Commissioner for Financial Services, delivered a keynote at the Blockchain for Europe Summit, presenting the EU’s evolving policy on blockchain, crypto-assets, and decentralised finance. She positioned blockchain and distributed ledger technology as foundational infrastructure for EU capital markets, enabling efficient issuance, broader access, and deeper liquidity. While recognising the potential for DeFi to be inclusive and efficient, the Commissioner reiterated a cautious approach to stablecoins, requiring compliance with EU regulatory and monetary standards. She also emphasised the need for integrated, real-time, cross-border supervision to address the speed and programmability of crypto markets.
ESMA Warns CASPs to End Unauthorised Operations as MiCA Transitional Periods Expire
The European Securities and Markets Authority (ESMA) stated the end of MiCA transitional arrangements, noting that unlicensed crypto-asset service providers (CASPs) must cease regulated activities and implement orderly wind-downs. ESMA emphasised that wind-down plans should prioritise client protection and ensure the safe return or transfer of crypto-assets. Late or incomplete authorisation applications should be treated with heightened supervisory caution, and national authorities are expected to enforce compliance where unauthorised operations continue. ESMA also highlighted the importance of cross-border coordination and advised investors to check CASP authorisation status via ESMA’s MiCA registers.
EU Advances Savings and Investments Union with Expanded Crypto Supervision and DLT Reforms
The European Commission adopted a legislative package under the Savings and Investments Union strategy, introducing major reforms for crypto-asset markets and distributed ledger technology (DLT). The package centralises ESMA’s supervision of all CASPs to harmonise MiCA enforcement across Member States, while significantly enhancing the DLT Pilot Regime by relaxing quantitative limits, increasing proportionality, and providing greater legal certainty for large-scale tokenised trading, settlement, and custody. These measures aim to position tokenisation and DLT-based market infrastructures as core components of EU capital markets, strengthen ESMA’s market surveillance and enforcement capabilities, and reduce fragmentation by limiting national discretion and increasing the use of directly applicable EU regulations.
Bank of Lithuania Issues Two MiCA CASP Licences
The Bank of Lithuania granted MiCA licences to UAB Nuvei Liquidity and UAB Decentralised, advancing the implementation of the EU’s crypto-asset licensing regime. Nuvei Liquidity was authorised to provide custody, administration, transfer, and exchange services, and also received a payment institution licence for e-money token operations. Decentralised was authorised to offer custody, administration, transfer, and exchange services under MiCA. The licences reinforce Lithuania’s leadership in MiCA implementation and underscore that only authorised entities may legally provide crypto-asset services in Lithuania and across the European Economic Area after the MiCA transitional period ends.
Latvijas Banka Grants MiCA CASP Licence to Nexdesk SIA
Latvijas Banka has authorised Nexdesk SIA under the MiCA Regulation to provide regulated crypto-asset services in Latvia and across the European Economic Area. The licence permits Nexdesk SIA to offer custody, administration, transfer, and exchange services, subject to ongoing compliance with MiCA’s prudential, governance, AML/CFT, and operational requirements. This authorisation reflects Latvia’s continued implementation of the MiCA licensing framework and confirms that Nexdesk SIA meets the regulatory standards for the safe and compliant provision of crypto-asset services.
Latvijas Banka Grants MiCA CASP Licence to BlockBen SIA
Latvijas Banka has authorised BlockBen SIA under the MiCA Regulation to provide regulated crypto-asset services in Latvia and across the European Economic Area. The licence permits BlockBen SIA to offer custody, administration, transfer, and exchange services, subject to ongoing compliance with MiCA’s prudential, governance, consumer protection, and AML/CFT requirements, as well as Latvian supervisory expectations. This authorisation confirms that BlockBen SIA meets the regulatory standards necessary to operate as a compliant crypto-asset service provider under MiCA. Source:
FCA Proposes Bespoke Prudential Regime for UK Crypto-Asset Firms
In December 2025, the FCA published Consultation Paper CP25/42 outlining a new prudential framework for crypto-asset firms in the UK, known as CRYPTOPRU. The proposed regime introduces a risk-based capital model aligned with existing UK investment firm standards, requiring firms to maintain own funds based on a permanent minimum, fixed overheads, or activity-related risk measures, with the option of firm-specific add-ons. Firms would also conduct ongoing assessments of capital and liquidity adequacy, including governance, recovery, and wind-down planning, subject to oversight by the governing body. The framework proposes strengthened requirements for liquidity management, group structures, intra-group dependencies, senior management accountability under the SM&CR, and enhanced regulatory reporting. Stakeholders can submit responses to the consultation by 12 February 2026.
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