The End of the MiCA Transition Period and Anti-Money Laundering Risks for Crypto-Asset Service Providers: A Warning from AMLA Chair Bruna Szego

Two weeks after July 1, 2026, when the MiCA transition period ended, the European crypto-asset sector is facing a critical migration phase. European Crypto-Asset Service Providers (CASPs) are currently undergoing a high-risk migration process from national regulatory regimes to a unified EU framework. Bruna Szego, Chair of the Anti-Money Laundering Authority (AMLA), warned that these massive changes entail risks of money laundering and terrorist financing.

In light of the new regulatory framework and major changes in the crypto-asset sector, it is essential that Europe is adequately protected from the money laundering and terrorist financing risks arising in this sector. — Bruna Szego, AMLA Chair

July 1, 2026, marks the beginning of a new regulatory reality for the European crypto-asset market. Companies operating without proper authorization after this date will face immediate enforcement actions, and regulators are requiring unauthorized firms to implement wind-down plans. Companies now stand at a crossroads: they must either be fully integrated into the MiCA licensing regime without regulatory gaps or exit the market in an orderly manner.

AMLA's Strategic Warning and Chair Szego's Mission

AMLA issued an advisory note on June 29, 2026, just before the end of the transition period, to deliver a final warning to market participants. Chair Szego emphasized that the massive changes in the crypto-asset market could expose vulnerabilities in the European financial system, suggesting that regulatory oversight will be stronger than ever. In a recent interview, she reaffirmed that AMLA will play a leading role in ensuring that Europe does not become a hotbed for illicit finance.

• Establishment of an operational, immediately executable, and reliable business termination plan
• Orderly transfer or return of customer assets to authorized virtual asset service providers
• Mandatory prior notice and provision of information to customers before plan execution
• Compliance with EU Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) obligations during all asset transfer processes

The 'migration strain' mentioned by AMLA refers to the operational complexities and risks that arise during the process of moving customers to a new licensing regime. Companies must demonstrate their ability to safely transfer assets without causing economic harm, as loopholes in this process can serve as conduits for illicit funds to enter the system. In particular, if Know Your Customer (KYC) procedures are inadequate during asset transfers, they will face intensive scrutiny from regulatory authorities.

Companies that fail to comply with MiCA regulations will face harsh legal consequences. Violating firms may be subject to administrative fines of up to 12.5% of their total annual turnover, and they risk immediate license revocation. Furthermore, management will be held personally liable and may face industry-wide bans. Regulatory authorities in various countries have already established dedicated virtual asset supervision teams to intensively monitor such instances of non-compliance.

Market Restructuring and Global Illicit Finance Trends

High compliance costs and strict regulatory requirements are acting as strong barriers to entry for small and medium-sized market participants. This is accelerating market consolidation, with many companies leaving the market or merging with larger firms. Consequently, a few large companies with abundant capital and regulatory response capabilities are expected to lead the European virtual asset market, which is seen as an opportunity to enhance market transparency.

Behind this regulatory tightening lies the surging flow of global illicit finance. According to a report by TRM Labs released in January 2026, illicit fund flows through virtual assets reached a record high of $158 billion during the year 2025. Sanctioned entities are strengthening 'layering' tactics, where funds are laundered through multiple stages, and AMLA is advancing its transaction monitoring technology to block these sophisticated methods.

Although the transition period deadline has passed, practical supervision and enforcement of the virtual asset market have now entered full swing. AMLA plans to solidify the regulatory infrastructure by strengthening transaction monitoring and wallet screening in the future, which will contribute to increasing the credibility of the virtual asset ecosystem within Europe. Virtual asset companies in the European market now face the challenge of establishing sustainable compliance monitoring systems beyond merely obtaining a license.