MiCA Transition Ends, License Shortage Triggers Europe's Largest Exchange Shutdown Wave

Original by Odaily (@OdailyChina)

Author: jk

On July 1, 2026, the transitional grace period for the European Union's Markets in Crypto-Assets Regulation (MiCA) officially ends.

From this date onward, any institution providing crypto-asset services to users within the EU must hold an official MiCA authorization license without exception. Unlicensed operators are prohibited from accepting new deposits or conducting new business. The French regulator AMF has explicitly warned that violations could result in up to two years imprisonment and fines of €30,000. Regulators also retain the authority to publish blacklists and apply for website blocking.

As of May 2026, approximately 194 crypto firms across the EU have obtained official MiCA authorization. In contrast, the number of crypto service providers previously registered or operating under individual European national regimes is estimated at between 1,100 and over 3,000. Law firm Hogan Lovells estimates that around 75% of legacy platforms will lose their legal operating status after the grace period ends. Exchanges that lack authorization and will become inaccessible include Binance, MEXC, and others.

What kind of regulatory test does this pose for exchanges? What do the details in MiCA say? Which exchanges will no longer be usable? What actions do users need to take? Odaily will explain them one by one.

What is MiCA?

MiCA is the EU's first-ever comprehensive regulatory framework for the crypto-asset market, officially taking effect in 2023. It covers all 27 EU member states, plus three EEA members: Norway, Iceland, and Liechtenstein.

Before MiCA, the regulation of crypto firms across Europe was highly fragmented. The same exchange needed to register with the financial regulator in Germany to operate there, obtain a PSAN license in France for its services, and meet varying thresholds and enforcement standards from country to country. MiCA's goal is to replace this fragmented landscape with a unified set of rules. This approach is also typical of EU policy-making.

As a broad and comprehensive regulatory framework, MiCA's scope covers a wide range. Any institution providing crypto-asset-related services to clients within the EU, collectively termed 'Crypto-Asset Service Providers' (CASPs), must apply for authorization from the national competent authority and clearly specify the categories of services they intend to offer.

MiCA divides CASP services into ten categories, including: operating a trading platform (order matching), custody and administration of crypto-assets, exchange of crypto-assets for funds or other crypto-assets, execution of orders on behalf of clients, portfolio management, and advisory services. A single MiCA license only covers the categories specified in the application. If an exchange wants to offer matching, custody, and transfer services simultaneously, it needs to apply for authorization covering multiple service categories.

MiCA also establishes a specific sub-framework for stablecoins. Stablecoins pegged to fiat currency and stablecoins pegged to a basket of assets must meet respective issuance authorization and reserve requirements. Those exceeding certain issuance thresholds face stricter regulatory constraints.

Furthermore, MiCA introduces the "Passporting" mechanism. Similar to how an EU citizen can live, work, and reside in any member state with their EU passport, a firm that obtains a MiCA license in any one EU member state can extend its services to other member states through a notification process, without needing to reapply in each country.

Differing Transition Periods?

The stablecoin rules under MiCA took effect first in June 2024, while the CASP provisions officially came into force at the end of December 2024. To accommodate crypto firms already registered or operating in individual member states, MiCA provided a transitional grace period. Each member state could determine the length of its own grace period, with a maximum of 18 months, meaning the latest end date was July 1, 2026.

The core logic of the grace period was to give platforms already operating under national regimes time to complete the MiCA application and approval process while continuing their business.

National approaches to the grace period varied considerably. The Netherlands terminated its grace period early on July 1, 2025, forcing a group of local exchanges to obtain licenses ahead of time. Germany shortened its national grace period to the end of 2025, using this deadline to pressure applicants and accelerate the approval process. When Lithuania's transition period ended, over 240 crypto firms registered there ceased operations. By June 2026, 20 of the 27 EU member states had ended their respective national transition periods before the overall July 1 deadline.

On April 17, 2026, the European Securities and Markets Authority (ESMA) issued an official statement confirming July 1 as the final and non-negotiable deadline. For CASPs still without authorization by the deadline, ESMA required an "orderly wind-down": cease accepting new deposits, halt new business activities, transfer existing user assets to licensed platforms, or assist users in moving assets to self-custodial wallets.

According to a report by Crypto News citing institutional data, as of May 2026, only about 194 crypto firms in the EU had obtained official MiCA authorization. In contrast, the number of crypto service providers previously registered or operating under various European national regimes is estimated to be between 1,100 and over 3,000. Law firm Hogan Lovells estimates that approximately 75% of platforms operating under the old registration systems will lose their legal operating status after the grace period.

How are Major Exchanges Responding?

Platforms that obtained licenses early

• Coinbase x Luxembourg: In June 2025, the Luxembourg Financial Sector Supervisory Commission (CSSF) granted a MiCA license to Coinbase's European subsidiary. This consolidated its numerous local licenses previously held in Ireland, Germany, France, Italy, the Netherlands, and Spain, making Luxembourg its single EU licensing hub to serve the entire EU via passporting.
• Kraken x Ireland: Kraken obtained a CASP authorization from the Central Bank of Ireland, while also holding a Luxembourg entity and a MiFID derivatives license.
• OKX x Malta: OKX was the first major exchange globally to receive MiCA authorization, licensed by the Malta Financial Services Authority (MFSA), using Malta as its base for passporting across the entire EU.
• Bybit x Austria: On May 28, 2025, Bybit received authorization from the Austrian Financial Market Authority (FMA), establishing its EU headquarters in Vienna to serve 29 EEA member states.
• Crypto.com received its full license in Malta on January 27, 2025, and Gemini was licensed in Malta in August of the same year. Bitstamp also chose Luxembourg, completing its CSSF authorization in May 2025 (now under Robinhood). eToro holds a CySEC license in Cyprus, while Robinhood completed its registration in Lithuania.

Platforms with pending applications, not yet authorized

Bitget is a case receiving significant attention. As of June 17, 2026, Bitget's application submitted to the Austrian FMA is still under review. Its EU headquarters is in Vienna, led by Oliver Stauber, formerly of KuCoin and Bitpanda. Pending approval, Bitget has suspended services for EEA users.

KuCoin's situation is more complex. It received authorization from the Austrian FMA in November 2025, but due to subsequent vacancies in key anti-money laundering and sanctions compliance positions, the FMA prohibited it from formally commencing operations. KuCoin has appealed this decision and remains unable to accept new EU users.

Stablecoins: Mixed Fortunes

While the shakeout among exchanges is still ongoing, the shakeout in the stablecoin sector has already concluded. Tether's USDT, the world's largest stablecoin, has never obtained MiCA authorization. CEO Paolo Ardoino publicly stated that MiCA's requirement to deposit a majority of EMT reserves into EU regulated bank accounts is incompatible with Tether's existing reserve model. The consequence: Coinbase delisted USDT in December 2024, Crypto.com followed on January 31, 2025, and Binance and Kraken delisted it in March 2025. USDT has fully exited major compliant platforms in the EU.

Circle's USDC and EURC have both received EMT authorization. As of June 2026, USDC's market capitalization stood at approximately $75 billion, making it the dominant stablecoin option for compliant EU scenarios. The Asset-Referenced Token (ART) framework represents the highest hurdle under MiCA, with no issuer having obtained authorization to date.

The Most Affected Platforms

Binance

Binance is the most prominent name in this shakeout. By scale, Binance boasts over 300 million registered users worldwide and, as the undisputed leader in the exchange space, should theoretically have been well-positioned to apply for MiCA.

In January 2026, Binance submitted a MiCA application through the Hellenic Capital Market Commission (HCMC) in Greece, positioning the country as the core base for its European expansion. However, on June 16, Reuters reported, citing two sources, that the HCMC was planning to reject Binance's application. Regulators from Greece, Ireland, and Latvia jointly reviewed the application, expressing concerns about Binance's past legal history and corporate governance structure.

On June 24, Binance officially announced it was withdrawing its application, stating it would resubmit in another EU member state and expected approval "within the coming months," without revealing the target country. Until it obtains a license, we may see Binance briefly exit the European market, potentially ceding some market share.

In its official statement, Binance stated: "Regarding user impact, Binance explained that some users might be affected, with specific circumstances varying by country and account status. The company is directly sending account-specific notifications to all EU users. These notifications will explain whether users need to take any action, available options, relevant timelines, and support channels."

Binance official statement, Source: Binance Square

MEXC and HTX

Compared to the high profile of the Binance situation, the cases of MEXC and HTX (formerly Huobi) are more subdued. Neither platform holds a MiCA license, nor do they have any publicly known application records.

What Should Users Do?

For EU users, after July 1, using unlicensed platforms entails several practical risks: the platform may stop accepting new deposits, may require users to withdraw funds within a specified timeframe, or may restrict account operations without prior notice. Analysis by OKX Europe found that between May 2025 and May 2026, approximately 41% of total European crypto app downloads were attributed to exchanges without MiCA authorization, estimating that around 60% of European crypto users are currently using unlicensed platforms.

If the platform you use has already notified users about an account migration—similar to what some EU users of Bybit, Bitvavo, Kraken, Coinbase, and Crypto.com experienced—it typically involves re-completing KYC identity verification and accepting updated terms of service. This is a standard procedure under MiCA's anti-money laundering requirements.

The Next Steps for Industry Regulation

MiCA is not the end point. The European Commission launched a formal review and consultation process for the MiCA regulation on May 20, 2026, soliciting feedback until August 31, with a final report due to be submitted to the European Parliament by June 30, 2027. The 86 questions in this consultation cover stablecoin competitiveness (especially the weakness of euro stablecoins against dollar stablecoins), DeFi, staking and lending, RWA tokenization, and whether ESMA should gain direct supervisory authority over major CASPs.

France, alongside Austria and Italy, explicitly supports the proposal for ESMA to directly supervise major CASPs, aiming to close the gap in standards among member states. Meanwhile, the Qivalis consortium, jointly launched by 37 banks including BNP Paribas, ING, and UniCredit, is developing a compliant euro-pegged stablecoin, seeking to carve out a space for the euro digital currency in a market dominated by dollar stablecoins.

The industry shakeout is still underway. Odaily will continue to track and report on developments.