MiCA Transition Ends, AMLA Warns Customer Shifts Could Stretch AML Controls

Europe's anti-money-laundering authority is warning that the end of the Markets in Crypto-Assets (MiCA) transition period on July 1 could trigger large-scale customer moves from unlicensed crypto platforms to authorized providers, potentially putting compliance systems under pressure. Bruna Szego, chair of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), told the European Parliament's Committee on Economic and Monetary Affairs that firms leaving the EU market should brace for spikes in withdrawal and transfer requests as users pull assets from platforms that are shutting down. Licensed virtual asset service providers (VASPs) absorbing those customers may face onboarding backlogs that could lead to weaker anti-money-laundering (AML) safeguards. Regulatory context: MiCA's 18-month transitional period expired on July 1, and cryptoasset service providers (CASPs) now need EU authorization to operate in the bloc. ESMA has instructed unauthorized firms that remain active to begin winding down EU operations, accelerating the shift of customers toward approved providers. Ahead of the deadline, AMLA issued guidance on money-laundering risks linked to the transition and set expectations for both exiting firms and licensed providers to maintain effective AML controls while customers move. AMLA's next steps: Szego said AMLA plans to publish a sector-wide report before year-end assessing money-laundering risks in crypto and reviewing how national supervisors are overseeing CASPs. AMLA is also expanding its blockchain analytics capabilities to strengthen oversight. The report will compare supervisory approaches across member states and highlight gaps that may require coordinated follow-up with national regulators. Follow-up supervision: ESMA's coordinated review. The warning comes as post-authorization scrutiny intensifies. On July 11, ESMA launched a Common Supervisory Action covering a sample of MiCA-authorized crypto custodians to test operational resilience, including private-key management, transaction controls, incident response, and reliance on third-party technology vendors. ESMA described the exercise as a reality check to confirm that operational safeguards function in practice, not only in documentation. Why it matters: A surge in onboarding can quickly increase KYC and transaction-monitoring workloads, while mass withdrawals can complicate asset reconciliation. The EU's combined approach of guidance and coordinated supervisory action signals that regulators will closely watch whether licensed firms preserve AML integrity as user bases expand. Bottom line: The MiCA transition ushers in a more heavily regulated phase for Europe's crypto market. Regulators are moving early to ensure that authorization is matched by robust, real-world compliance and operational resilience as customers migrate across the ecosystem.