Italy Sets Firm MiCA Compliance Cutoff for Crypto Firms Amid Sector Restructuring

Regulatory Timelines, Transitional Rules, and Market Impact as 30 December Deadline Approaches

TL;DR

• Italy’s securities regulator set a hard 30 December 2025 cutoff for all VASPs to file MiCA-compliant CASP applications or shut down.
• Firms that apply by the deadline may continue operating until 30 June 2026, while non-applicants must cease services and return client assets.
• Group-level licensing provisions create limited flexibility, but legal ambiguity and enforcement risks still loom over the sector.

Italy’s financial watchdog delivered one of the sharpest regulatory pivots in the post-MiCA era with a formal notice dated 4 December 2025, ordering all virtual-asset service providers operating in the country to obtain authorization as crypto-asset service providers under the EU’s MiCA regime or wind down operations by 30 December 2025. The directive sets a hard national deadline that overrides the softer, default MiCA transitional windows used elsewhere in the EU, signaling that Italy intends to bring its crypto market into full regulatory alignment far earlier than many firms anticipated. The regulator made clear that only fully authorized CASPs, including those passporting through another EU jurisdiction, will be permitted to transact with Italian clients after the cutoff, a shift that places immediate pressure on platforms relying on legacy registrations.

VASPs that submit a CASP application—whether to Italian authorities or any other EU member state—by the 30 December deadline will be allowed to continue serving clients while their authorization is under review. This temporary permission ends the moment the application is approved or rejected, but cannot extend beyond 30 June 2026, establishing a strict six-month ceiling for firms attempting to transition into the new regulatory perimeter. The notice also imposes sweeping obligations on companies electing not to pursue MiCA authorization. Those firms must halt services to Italian users by the December deadline, unwind all outstanding contracts, and return customers’ crypto-assets and funds in accordance with user instructions. Operators must additionally publish clear disclosures on their websites and directly inform clients whether they intend to remain in the Italian market under MiCA or plan to exit entirely, making customer communication a regulated duty rather than a courtesy.

Italy’s MiCA implementation goes further than licensing. Once authorized, CASPs will fall under a supervisory framework resembling the obligations imposed on investment firms and other regulated financial entities. The standards include strict segregation of client assets, mandated accounting and auditing under IAS/IFRS rules, elevated corporate-governance requirements, and reinforced transparency and AML protocols. This architecture reflects the regulator’s message that MiCA is not a branding exercise but a fundamental restructuring of operational, technical, and fiduciary expectations. 

Industry attorneys point to updated national legislation—particularly amendments carried by Law Decree 95/2025—that expand transitional options for corporate groups. If a group entity obtains a MiCA license by 30 December, other VASPs within the same group, provided they were registered as of 27 December 2024, may continue operating until June 2026 on the strength of the group’s authorization. That provision offers a strategic route for multi-entity operators, though legal specialists highlight outstanding uncertainties, including whether the benefit still applies when the licensed group entity operates outside Italy or serves primarily as a reporting hub.

The regulator coupled its directive with a consumer-facing warning, urging retail users to verify whether their provider has communicated a clear MiCA compliance plan or intends to terminate operations. The advisory emphasizes that many existing platforms may become unauthorized after 30 December, exposing customers to service disruptions or forced offboarding. The message underscores a broader regulatory concern across Europe: authorities aim to eliminate the grey zones that allowed unlicensed providers to scale rapidly without standardized oversight. Italy’s decision to compress MiCA timelines into a single decisive enforcement window stands out within the EU landscape and signals that non-compliant platforms may face sanctions or forced liquidation of operations if they continue serving Italian residents after the deadline.

The upcoming cutoff introduces a potential reshuffling of market presence in Italy, where dozens of VASPs rely on minimal registration rather than full licensing. The ruling forces strategic choices: accelerate MiCA authorization, restructure under a group umbrella, or withdraw from the jurisdiction. For larger EU operators, the pathway is clear but demanding; for smaller firms, the cost and complexity of compliance may outweigh the value of remaining in the market. As the 30 December deadline approaches, Italian regulators appear determined to replace a permissive registration regime with a tightly supervised licensing model, with the transitional window extending only long enough to distinguish committed operators from those unprepared to meet MiCA’s elevated standards.

This article has been refined and enhanced by ChatGPT.