European crypto regulation takes a major step: Lithuania may ban hundreds of unlicensed crypto companies next week, as MiCA enforcement enters a practical phase

European crypto regulation is about to reach a critical milestone. Lithuania, as a member of the European Union, plans to launch one of the EU’s strictest cryptocurrency enforcement actions starting next week. Hundreds of crypto companies that have not obtained MiCA licenses may face fines, website bans, or even criminal charges. This move marks the official transition of the EU’s Markets in Crypto-Assets Regulation (MiCA) from a regulatory framework to full enforcement.

The Bank of Lithuania has explicitly stated that any platform that continues to attract users, provide cryptocurrency trading, custody, or wallet services without MiCA authorization after December 31 will be considered illegal. Starting January 1, Lithuania will implement strict regulatory measures against unlicensed crypto asset service providers.

Currently, over 370 crypto-related companies have registered in Lithuania, but only about 120 are actively operating and reporting income. More critically, fewer than 30 companies have applied for MiCA licenses, accounting for less than 10%. This means that many active crypto exchanges, wallet operators, and service platforms are at high risk of non-compliance.

According to regulatory arrangements, the MiCA transition period for crypto service providers will last until the end of 2025. However, the Bank of Lithuania has made it clear that after the transition period ends, it will take strict measures against non-compliant companies, including financial penalties, website blocking, and criminal prosecution, with a maximum sentence of four years in prison.

Regulators also emphasize that an orderly exit is equally important. Crypto companies that do not plan to continue operations should communicate with users in advance, clearly explaining how to transfer fiat and digital assets to other compliant custodians or self-custody wallets to protect investors’ rights and market stability.

This action also shifts Lithuania from a “lenient registration location” to a “MiCA-compliant portal.” Enforcement targets are not limited to active platforms but also include registered entities that still maintain websites, accounts, or custody services. This approach helps improve transparency and integrity in the European crypto market.

On a broader scale, Europe is tightening crypto regulation overall. Besides Lithuania, Latvia also aims to become a MiCA compliance hub in the Baltic region, and many crypto platforms are accelerating their MiCA compliance processes. As the deadline approaches, the European crypto industry is entering a phase of deep reshuffling, and a robust regulatory landscape under MiCA has taken shape.