Crypto.com has announced the removal of Tether (USDT) and other stablecoins from its platform in Europe, in compliance with new regulations established by the European Union under the MiCA (Markets in Cryptoassets) framework. This decision, which affects a total of ten cryptocurrencies, will come into effect on January 31, 2025.

Context of MiCA Regulation

The MiCA regulation was implemented to regulate the growing cryptocurrency market in Europe, seeking to protect consumers and ensure financial stability. This regulation requires stablecoin issuers and related service providers to comply with specific requirements to legally operate in the European Economic Area (EEA). Since its entry into force, exchanges have been urged to remove any asset that does not comply with these new guidelines.

Removal Details

In a statement sent to its users, Crypto.com announced that it will suspend purchases and deposits of USDT and other stablecoins such as PayPal USD (PYUSD), Wrapped Bitcoin (WBTC), Dai (DAI), Pax Dollar (PAX), among others. Starting January 31, users will not be able to purchase these assets, although withdrawals will continue to be allowed until March 31, 2025. After this date, any remaining balance will be automatically converted to a MiCA-compatible stablecoin or equivalent asset.

List of Affected Cryptocurrencies

- Tether (USDT)

- PayPal USD (PYUSD)

- Wrapped Bitcoin (WBTC)

- Dai (DAI)

- Pax Dollar (PAX)

- Pax Gold (PAXG)

- Crypto.com Staked ETH (CDCETH)

- Crypto.com Staked SOL (CDCSOL)

- Liquid CRO (LCRO)

- XSGD

Implications for Users

Users holding these assets must act quickly to convert them into MiCA-compliant cryptocurrencies before March 31. Failure to do so will result in their assets being automatically converted, which could result in losses if the value of the new asset is not favorable.

The move also reflects a broader trend among European exchanges. Platforms like OKX, Uphold, and Binance have made similar decisions by removing unauthorized stablecoins. Coinbase, meanwhile, suspended six tokens, including USDT and PYUSD, signaling a coordinated move toward regulatory compliance.

Market Reactions

Crypto.com’s delisting of USDT and other stablecoins could have a significant impact on European market liquidity. Investors and traders will need to re-evaluate their strategies, especially those who have used these coins as stores of value or means of transactions.

Industry experts suggest that this regulation could lead to a reconfiguration of the European stablecoin market. Assets that manage to adapt to the new regulations could benefit from greater trust from consumers and regulators.

Crypto.com's Position

A Crypto.com spokesperson confirmed the decision, noting that it is part of the exchange’s commitment to comply with regulatory requirements set by MiCA. The firm has been working to ensure its operations are transparent and secure for its users.

MiCA compliance is not only crucial for Crypto.com but also for other exchanges operating in the region. The European Securities and Markets Authority (ESMA) has stressed the urgent need to adhere to these regulations, which could result in sanctions for those who fail to do so.

Future of the European Market

As the regulatory framework becomes more firmly established in Europe, other exchanges are expected to follow Crypto.com’s lead. This could result in decreased access to certain unsupported stablecoins and increased adoption of MiCA-approved alternatives.

Stablecoins such as USD Coin ($USDC ), issued by Circle, have proven to meet regulatory requirements and will continue to operate without interruption. This suggests there is an opportunity for cryptocurrencies that align with regulatory expectations.

Conclusion

Crypto.com’s decision to delist USDT and other stablecoins is a direct reflection of the changing regulatory environment in Europe. As the market adjusts to these new regulations, it will be critical to see how both users and exchanges react to these restrictions. Regulation may be seen as a hindrance by some, but it can also open doors to greater legitimacy and stability within the European crypto ecosystem.

Over time, these measures are expected to contribute to a safer and more reliable market for all participants. Users should stay informed about these changes in order to protect their investments and maximize their potential within the new regulatory framework established by the EU.