ESMA launches first crypto sweep after MiCA takes effect and AscendEX collapses, freezing hundreds of millions in user funds. The test shows how the new rules handle real failures.
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The European Securities and Markets Authority (ESMA) launched its first supervisory sweep of licensed crypto firms on July 8, putting custody resilience under EU-wide review. The move comes days after MiCA took full effect and popular exchange AscendEX (formerly BitMax) collapsed, freezing hundreds of millions in user funds.
The AscendEX collapse is the first major test of how MiCA handles exchange failures. The exchange had reported over $100 million in daily trading volume before it halted withdrawals. Users are now dealing with the new framework's complex recovery procedures, which include mandatory compensation mechanisms and regulatory cooperation across member states. The situation is raising questions about whether MiCA's safeguards are sufficient for a real failure, according to lawyers tracking the regime.
MiCA requires exchanges to segregate customer assets from their own and maintain insurance or comparable coverage. The AscendEX failure exposes gaps in how those rules are enforced. Custody resilience has become the immediate focus of the supervisory sweep, ESMA said.
The review extends beyond AscendEX. ESMA is checking whether all licensed exchanges comply with the same standards. Exchanges that fall short could face penalties or license revocations. The supervision also tests the coordination between national regulators, who now enforce a common rule book. The ESMA sweep is part of a broader pattern of stricter oversight, including recent moves in Kazakhstan covered in MiCA Enforcement Tightens as Kazakhstan Opens Crypto Banking.
The collapse shows that even licensed exchanges can fail and MiCA's framework is still unproven. The review covers licensed crypto firms across the EU, ESMA said.
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