Key facts
- EU crypto firms have until January 8, 2027, to exit services involving non-compliant stablecoins.
- ESMA's guidance covers trading platforms, custody, investment advice, and portfolio management.
- Ethereum co-founder Vitalik Buterin agrees that AI advancements pose a serious risk to blockchain cryptography.
- US lawmaker French Hill wants to pass the CLARITY Act during the post-election lame-duck session.
- The SEC and CFTC are continuing to issue new rules for crypto oversight.
Crypto firms operating in the European Union have been given a three-month deadline to cease providing services related to stablecoins that do not comply with the Markets in Crypto-Assets Regulation (MiCA) framework. The European Securities and Markets Authority (ESMA) issued this guidance on Thursday, urging national regulators to ensure companies address existing exposures to non-compliant stablecoins by January 8, 2027.
This directive applies to MiCA-regulated services, including trading platforms, exchange services, order execution, custody, transfers, investment advice, and portfolio management. The update builds upon ESMA's January 2025 guidance that recommended restrictions on trading and exchange services involving non-compliant stablecoins.
In parallel, Ethereum co-founder Vitalik Buterin has lent his support to warnings that rapid advancements in artificial intelligence could pose a significant threat to the cryptography underpinning current blockchains, potentially sooner than quantum computing. Buterin was responding to Ethereum researcher Justin Drake, who advised the industry to prepare for a "bunker mode" as AI might eventually be capable of breaking the elliptic curve digital signature algorithm (ECDSA) that secures cryptocurrency wallets. Drake suggested a gradual migration of funds to new wallets where public keys are not exposed, though Buterin cautioned against immediate action, emphasizing the need to take AI's cryptographic risks seriously.
Meanwhile, US lawmaker French Hill is advocating for the revival of the CLARITY Act, a bill aimed at structuring the crypto market. Hill expressed hope that the legislation could be passed during the lame-duck session following the November midterm elections. This push comes as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) continue to advance their own rulemaking processes. The CFTC has updated its guidance on tokenized assets and blockchain recordkeeping, while the SEC has revised its rules concerning federal securities laws for crypto assets. Hill contends that these regulatory efforts, while ongoing, lack the legislative permanence required for comprehensive crypto oversight.