This Wednesday, July 31, brought worrying news for crypto asset providers that do not have official registration in the EU and still operate in the region. The article published on the ESMA (European Securities and Markets Authority) website cites MICA (Markets in Crypto-Assets) regulations as the legal basis for the alert directed at issuers of NFTs, wallets, and cryptocurrencies.
The opinion article is likely to have a significant impact on the European crypto asset exchange market, as it may encourage the withdrawal of cryptocurrencies and platforms from exchanges that do not comply with the MICA regulatory framework. To help investors prepare for this impact, we will share a detailed analysis of the opinion article and the rules it establishes.
The Alert
The ESMA alert details its legal basis, background, and general considerations. In the requirements’ subsection, the document states that “According to Article 59 of MICA, companies from third countries cannot provide crypto asset services in the Union.”
In the following paragraph, the authors add that “Article 61 of MICA, however, provides an exemption to this principle. This application exemption only applies when the third-country company has not solicited, promoted, or advertised crypto asset services or activities to customers or potential customers in the Union.”
The remaining text extensively underscores the importance for crypto asset exchange platforms to adjust their marketing policies to avoid non-compliance. Furthermore, the opinion article states that “according to Article 66 of MICA, crypto asset providers must act honestly, fairly, and professionally in the best interest of their clients.”
How the Alert Will Impact European Investors?
As both requirements express, the alert aims to ensure the safety of European investors, demanding transparency and fair practices from digital asset providers.
Following the recent withdrawals of USDT by the OKX platform in Europe in an attempt to comply with MICA regulations, many may wonder if investment options in crypto assets will become limited in the region due to these regulations.
In fact, many are questioning whether popular platforms like Kraken that allow customers to invest in currencies like Bitcoin, Ethereum, Solana, and Dogecoin will respond to this alert by limiting their offerings or if they will be able to comply with the regulations and continue to offer a wide range of digital assets.
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