First conduct an activity and timeline review
Establish when the service was launched, which countries it serves, where clients and funds are located, and what the platform specifically controlled, then assess this against the rules in force at the time and the rules currently in force. Some technical services may fall outside the scope of regulation, while certain exchange, custody or payment activities may long ago have required a licence. The UK FCA makes clear that businesses falling within the scope of its anti-money laundering registration must complete registration before commencing business; this is a different status from 'the application has already been submitted'. It cannot be presumed that all business is unlawful merely because the platform has no licence, nor can the issue be excluded on the basis of a self-description as a technology company.
Remediation must also take account of existing clients
It may be necessary to stop accepting new clients, suspend the addition of restricted functions, and arrange migration to a lawful service provider or an orderly exit, but the legal basis and contractual requirements should be confirmed at each step. Client assets, outstanding orders, reports and records must not disappear because the site is shut down; changing the brand or the contracting entity does not automatically sever the original liabilities. Where lawfully frozen or suspicious funds are involved, it is equally impermissible to refund them directly without assessment on exit.
During the suspension, the business team should be given clear instructions: which orders may still be lawfully completed, which must not continue to be accepted, who is to answer client enquiries, and what review is required for refunds or migration. Without written boundaries, sales may interpret a stop on new orders as merely ceasing marketing, while the system continues to accept automated deposits. Website entry points, interface permissions and partner routing can be tested item by item to confirm that the remediation plan has been implemented at the operational level; retaining the necessary enquiry and data access functions also assists existing clients in pursuing remedies later.
Hypothetical scenario: a regulatory transition is not a permanent grace period
Assume that an EU undertaking once operated under the former local regime but never completed the MiCA transition. In its official 2026 announcement, the French AMF stated that the transitional arrangements under the former local regime applied until 1 July 2026 and ended with effect from 2 July. This example shows that what was permissible historically is not necessarily permissible now, and the specific transitional conditions and existing licences of the relevant country should be checked; undertakings that do not meet the transitional conditions certainly cannot rely on another party's grace period.
Separate future applications and historical treatment into two workstreams
The future workstream should identify the business activities that may be applied for, together with gaps in personnel, capital and systems; the historical workstream should verify transactions, client losses, necessary reporting and the manner of communication with regulators. Whether and how to make voluntary disclosure should be handled under local rules and with professional advice, without concealment or the creation of documents after the event. Where business prohibited in mainland China is involved, under the 2026 risk notice there is no general route by which the original model can be legitimised by applying for an ordinary crypto payment licence; cessation or substantive restructuring should be considered rather than seeking a nominal wrapper.
Recommended actions
- Prepare a matrix of business activities, countries, launch dates and required qualifications, marking historical and current differences.
- Establish a list of client funds and outstanding orders, and formulate a lawful suspension, migration or exit plan.
- Assign separate persons responsible for application preparation and for handling historical risks, and maintain separate evidence files for each.
This content is for general information only and does not constitute legal advice. Please consult a qualified lawyer about specific matters.
References
- Cryptoassets: AML / CTF regime — UK FCA
- Crypto-assets: the end of the Pacte law and European MiCA Regulation transitional period establishes a new role for the AMF — French AMF
- Notice on Further Preventing and Addressing Risks Associated with Virtual Currency and Related Matters (Yin Fa [2026] No. 42) — Eight departments including the People's Bank of China / official website of the China Securities Regulatory Commission
