Reed Smith Aquarius and MiCA Compliance: Navigating the New EU Crypto Regulatory Era

How it helps crypto firms:

Aquarius automates several of the most burdensome compliance tasks under MiCA:

• Automated classification of crypto-assets under MiCA's regulatory categories (utility tokens, e-money tokens, asset-referenced tokens) .
• Generation of regulatory whitepapers, one of the core disclosure obligations under MiCA .
• Licensing and operational workflow management, helping firms navigate authorisation processes .
• Ongoing compliance monitoring to keep pace with evolving MiCA requirements .

The launch was timed to coincide with the end of MiCA's transitional period, when unlicensed firms could no longer legally serve EU clients . Reed Smith stated that Aquarius "reflects our commitment to helping clients navigate complex regulatory frameworks with greater confidence, efficiency, and speed" .

End of the Transitional Period: July 1, 2026

Under Article 143(3) of MiCA, crypto-asset service providers that had been operating under pre-existing national regimes before MiCA applied could continue trading while pursuing full MiCA authorisation . That grandfathering window closed on July 1, 2026.

What changed after July 1:

• Any CASP operating in the EU without a MiCA licence is now in breach of EU law and must cease all EU-facing operations .
• ESMA confirmed on April 17, 2026 that no further extensions would be granted .
• ESMA issued a public statement on June 23, 2026 calling on unauthorised CASPs to wind down in an orderly manner and safeguard client interests .
• Estimates suggest that up to 75% of crypto platforms that had relied on national grandfathering may have lost their operating rights, as they will not have obtained full authorisation .

The practical consequence is clear: any firm serving EU clients without proper authorisation is now breaking EU law, not merely operating in a compliance gap .

ESMA's Custody-Focused Supervisory Review

On July 8, 2026, ESMA launched its first Common Supervisory Action (CSA) under full MiCA enforcement. The action targets the digital operational resilience of crypto-asset custody arrangements held by CASPs .

Key points:

• This is the first coordinated, EU-wide supervisory review since MiCA entered full effect .
• The review focuses on how CASPs safeguard client crypto-assets, including custody protocols, IT security, governance, key management, transaction controls, incident response, and third-party dependencies .
• ESMA is conducting the CSA jointly with national competent authorities (NCAs) across member states .
• The review will run from the second half of 2026 through the first half of 2027 .
• It follows a broader trend of ESMA issuing supervisory briefings and guidelines to ensure convergent authorisation and market abuse detection practices across the EU .

This review signals that EU regulators are now actively scrutinising how authorised providers handle client assets and manage operational risks.

European Commission's "MiCA 2" Consultation

On May 20, 2026, the European Commission (DG FISMA) launched two parallel consultations to review the functioning of MiCA — widely referred to informally as "MiCA 2" :

Both consultations close on August 31, 2026 .

What the consultations cover:

• Scope of crypto-assets covered and potential gaps (e.g., DeFi, NFTs, lending, staking).
• Treatment of stablecoins (ARTs and EMTs), including interest distribution. The consultation reportedly asks whether the stablecoin regime that pushed Tether's USDT out of the EU is disproportionate .
• Authorisation and supervision frameworks for CASPs.
• Cross-border issues and third-country access .

Timeline:

• A formal legislative proposal is expected no earlier than 2028, following the Commission's mandated review report due by June 30, 2027 under Article 140(1) of MiCA .
• The consultation is not a legislative proposal itself; it is a fact-gathering exercise that will inform potential amendments .

Industry observers have noted that the consultation signals the EU is already reassessing whether MiCA's original perimeter, drawn in 2023, still fits the rapidly evolving crypto landscape, particularly regarding DeFi, staking, and tokenised deposits .