Fraudsters have begun impersonating European financial regulators and licensed crypto businesses to exploit customers moving funds after the European Union’s MiCA licensing deadline reshaped the regional crypto market.
Summary
- European regulators have reported a rise in scams targeting crypto users after the MiCA licensing deadline.
- Fraudsters have posed as financial regulators and licensed crypto firms to steal customer assets.
- ESMA has warned that criminals are using its name, logo and fake documents to deceive users.
- More than 1,700 unlicensed crypto firms were expected to leave the EU market after MiCA took effect.
- Customers moving assets to authorized providers have become a key target for the new scams.
The Financial Times, citing European regulators, reported that several watchdogs have identified a rise in scams since the July 1 deadline requiring crypto firms to obtain authorization under the European Union’s Markets in Crypto-Assets (MiCA) Regulation.
Companies that failed to secure approval must either wind down their operations or transfer customers to licensed providers, creating an opportunity for fraudsters targeting users searching for new platforms.
MiCA transition has created a new opening for scammers
Following the end of MiCA’s transition period on July 1, crypto-asset service providers serving customers across the European Union without authorization were required to stop regulated activities and help clients move their assets to an authorized provider or a self-hosted wallet.
According to the Financial Times, several European regulators have since recorded an increase in impersonation scams directed at customers affected by the migration process.
Stéphane Pontoizeau, an official at France’s Autorité des Marchés Financiers (AMF), said the regulator had encountered cases in which criminals posed as AMF representatives and persuaded users to transfer their crypto assets through fraudulent websites designed to resemble official services.
Rather than contacting investors directly as legitimate regulators would, the fake websites instructed victims to move their assets under the pretense of regulatory protection or compliance, according to the report.
ESMA has warned that its identity is also being misused
The European Securities and Markets Authority (ESMA) told the Financial Times it was aware of criminals using the regulator’s name, logo and forged documents to appear legitimate.
According to ESMA, scammers may specifically target customers looking for a licensed replacement after their previous crypto service provider exited the European market.
The warning comes as investors increasingly rely on official registers to identify authorized firms. ESMA’s public register, updated at the end of July, listed 323 crypto companies that had obtained MiCA authorization across the bloc.
Earlier estimates from data provider VASPnet suggested that more than 1,700 companies operating without MiCA licenses would eventually need to cease serving EU customers once the transition period ended.
Licensed providers have replaced thousands of earlier registrations
The current migration follows one of the biggest regulatory changes in Europe’s crypto market.
Before MiCA took full effect, more than 3,000 crypto firms operated under various national registration systems. During the licensing process, however, only 194 companies had secured MiCA approval by May before the number climbed to around 300 near the July deadline and later reached 323, according to ESMA’s register.
Unlike the earlier national regimes, MiCA requires authorized firms to maintain ongoing governance, capital, cybersecurity, complaint handling, market conduct and anti-money laundering controls rather than obtaining a one-time license.
Industry participants have previously said those continuing compliance obligations could encourage mergers, acquisitions or partnerships with banks as smaller firms absorb the cost of operating under the new framework.
Enforcement has continued as EU countries align with MiCA
Several recent regulatory developments have reinforced the post-MiCA compliance environment across Europe.
Last month, the Council of the European Union adopted new sanctions preventing Belarusian nationals and residents from owning, controlling or serving on the governing bodies of MiCA-authorized crypto-asset service providers from Aug. 25. The restrictions form part of the bloc’s sanctions policy connected to Russia’s war against Ukraine and followed the completion of MiCA’s transition period.
Meanwhile, Hungary has moved in the opposite direction by removing a national cryptocurrency validator requirement that had operated alongside MiCA. The Hungarian Parliament voted to repeal the additional approval process after the government said the earlier framework had disrupted the domestic crypto market and prompted several businesses to suspend or reduce their services.
The repeal leaves MiCA’s licensing and compliance requirements unchanged while removing an extra domestic transaction validation layer. Shortly before the legislative change, Budapest-based CoinCash became Hungary’s first company to receive direct MiCA authorization from the National Bank of Hungary, allowing it to gradually restore and expand regulated crypto services.
Against that backdrop, European regulators have warned that users moving assets because of licensing changes should verify communications carefully, as criminals are increasingly attempting to exploit the transition by posing as financial authorities and authorized crypto businesses.
