Italy’s Market Watchdog Gives Crypto Firms A Clear Order: Act Or Exit

Overview

Italy’s securities regulator, Consob, has issued a directive to crypto and virtual asset service providers (VASPs) requiring them to secure authorization under the EU’s Markets in Crypto-Assets regime (MiCA) by December 30, 2025. Failure to comply will result in the cessation of services to Italian clients and the return of customer funds.

Details of the Directive

On December 4, 2025, Consob announced that all crypto firms must apply for a MiCA-compliant license by the specified deadline. Those who do not submit an application must halt their services and ensure the safe return of customer assets by the end of the year. Companies that file for authorization by the cutoff date may continue operating while their applications are under review, but this provisional permission is limited and will expire on June 30, 2026.

The directive specifically targets platforms that have previously operated under Italy’s lighter national registry system, known as OAM. These companies must now choose between applying for full authorization as crypto-asset service providers (CASPs) under MiCA or planning an orderly exit from the market. If a firm decides to exit, it must clearly notify users and return assets in a safe and verifiable manner.

Broader Risk Review

In conjunction with Consob’s directive, Italy’s Economy Ministry has initiated a comprehensive review of crypto-related risks. This review involves collaboration between the Bank of Italy, Consob, and other relevant agencies, focusing on the adequacy of current protections for investors and the overall financial system. The review was prompted by concerns about increasing exposure to cryptocurrencies and the potential spillover effects into traditional finance.

What Investors Should Monitor

Investors in Italy are advised to verify whether their chosen platforms have submitted a MiCA application or have made clear plans for compliance or exit. If an operator fails to apply by the December 30 deadline, users may experience service interruptions and will need to follow the provider’s instructions for retrieving their funds. Regulators emphasize the importance of transparency from firms in the coming weeks.

Impact on the Crypto Market

• The directive establishes a firm deadline for crypto firms, creating urgency for compliance.
• Operators are faced with the choice to either apply for full authorization or exit the market, impacting service availability for users.
• The review initiated by the Economy Ministry may lead to stricter oversight and regulations in the crypto space.
• Smaller local platforms may struggle with the compliance requirements, potentially leading to market consolidation or exits.
• Transparency and communication from crypto firms will be crucial for maintaining customer trust during this transition period.