Mass movement of users at the end of the Markets in Crypto-Assets Regulation (MiCA) transitional period could put substantial pressure on compliance systems at virtual asset service providers (VASPs) across the European Union, according to Bruna Szego, chair of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA).
Compliance risks highlighted as MiCA deadline passes
Speaking at a European Parliament Committee on Economic and Monetary Affairs briefing, Szego cautioned that the conclusion of MiCA’s 18-month transitional period on July 1, which requires crypto asset service providers (CASPs) to secure a license to operate in the EU, would trigger a significant withdrawal of customers and onboarding of new users. These developments, she explained, could create compliance challenges for both firms leaving the EU market and licensed providers absorbing new clients.
Szego explained that as customers rush to withdraw funds from firms winding down operations, and as licensed crypto companies onboard a wave of new users, the resulting activity is likely to strain compliance protocols and operational capacity at VASPs.
The European Securities and Markets Authority (ESMA) has stated that crypto service providers without the necessary authorization by the deadline must take immediate steps to wind down their EU-focused activities. Szego urged all service providers to ensure robust anti-money laundering (AML) and compliance processes remain in place throughout this transitional phase.
AMLA advisory and next steps
Ahead of the pivotal July 1 deadline, AMLA distributed an advisory note to crypto companies, warning of increased money laundering risks associated with the end of the transitional period. This guidance detailed both the procedures for companies ceasing EU operations and the onboarding responsibilities for licensed entities in order to uphold effective anti-money laundering measures.
AMLA, the EU-level body responsible for overseeing anti-money laundering practices, plans to intensify its monitoring of the crypto sector. Szego announced that AMLA will publish a report before year’s end assessing money laundering risks within the crypto industry and examining supervisory practices across EU member states.
The authority is also enhancing its blockchain analytics capabilities to support oversight of crypto-asset service providers. This expansion aims to provide national regulators with advanced tools for monitoring and enforcing AML compliance across digital asset platforms.
Mini dictionary: AMLA (Authority for Anti-Money Laundering and Countering the Financing of Terrorism) is a European Union agency established to coordinate and oversee anti-money laundering and counter-terrorism financing activities across EU member states and financial sectors, including crypto assets.
Coordinated oversight and upcoming report
The forthcoming AMLA report is expected to evaluate how national authorities supervise crypto-asset service providers, while pinpointing differences in supervisory approaches throughout the EU. Szego stated that AMLA aims to leverage these findings to coordinate future actions with national regulators, pursuing more consistent anti-money laundering oversight of the crypto sector.
According to Szego, the authority intends to use the results of its analysis to improve cross-border regulatory coordination and strengthen overall compliance within the European crypto industry.
