Cryptocurrency exchange Kraken is taking significant steps to align with the European Union’s Markets in Crypto-Assets Regulation (MiCA) by preparing to delist five stablecoins, including Tether’s USDt (USDT). The exchange confirmed that it will fully remove USDT from its platform by March 31, 2025, as part of its compliance strategy. Alongside USDT, Kraken will also gradually phase out support for PayPal USD (PYUSD), Tether EURt (EURT), TrueUSD (TUSD), and TerraClassicUSD (USTC) in the European market.
In its official announcement, Kraken emphasized that these changes are essential to ensure long-term compliance and to continue offering a seamless trading experience for its European clients. The exchange stated, “These changes ultimately ensure Kraken remains compliant and is able to provide its exceptional trading experience to European clients for the long term.”
Gradual Delisting Process to Ensure Market Stability
Kraken’s delisting process will follow a phased approach, as outlined by the European Securities and Markets Authority (ESMA), to avoid market disruptions and ensure a smooth transition. The exchange will begin by setting margin pairs involving the affected assets to “reduce-only” mode for clients in the European Economic Area (EEA) starting February 13, 2024. This means EEA users will only be able to reduce or close existing margin positions.
By February 27, 2024, Kraken will transition the affected tokens to “sell-only” mode. During this phase, EEA clients will no longer be able to generate deposit addresses for tokens like USDT but can still trade them. On March 24, 2025, Kraken will halt all spot trading for the impacted assets, closing all open orders and exchanges into other cryptocurrencies or fiat currencies.
Kraken clarified that any remaining holdings of these assets in EEA client accounts as of March 31, 2025, will be automatically converted to an equivalent MiCA-compliant stablecoin. The exchange added, “Any impacted assets for EEA clients deposited to existing addresses after the above deadlines will only be able to be withdrawn.”
It’s important to note that these delistings will only affect clients in the EEA, which includes 30 countries such as Austria, Cyprus, Czechia, Malta, Portugal, Spain, and Sweden.
ESMA Calls for Orderly Transition to Avoid Market Disruptions
Kraken’s announcement comes as other major exchanges, such as Crypto.com, also prepare to delist non-compliant stablecoins. Crypto.com confirmed that it will remove USDT and nine other stablecoins starting January 31, 2025, giving users until the end of Q1 2025 to convert their holdings to MiCA-compliant tokens. The exchange stated, “Otherwise, they will be automatically converted to a compliant stablecoin or asset of corresponding market value.”
The ESMA, a key regulator overseeing MiCA compliance, has urged European crypto asset service providers (CASPs) to adopt a gradual approach to delisting non-compliant stablecoins. The agency emphasized the importance of avoiding abrupt actions that could lead to “disorderly markets.” In its guidance, ESMA recommended starting with a “sell-only” mode to mitigate potential disruptions and ensure a smooth transition.
ESMA stated, “Sudden actions to align with MiCA, as clarified in the European Commission’s guidance, could potentially lead to disorderly crypto-assets markets. […] To mitigate potential disruptions and ensure a smooth and orderly transition, National Competent Authorities should ensure compliance […] no later than the end of Q1 2025.”
Leading Exchanges Take Proactive Steps
Kraken and Crypto.com are among the first CASPs in the EU to announce delistings of MiCA non-compliant stablecoins in 2025. Earlier, in December 2024, U.S.-based exchange Coinbase also delisted eight tokens, including USDT, as part of its compliance efforts.
These proactive measures by major exchanges highlight the growing importance of regulatory compliance in the cryptocurrency industry. By adhering to MiCA regulations, exchanges like Kraken aim to foster trust, stability, and long-term growth in the European crypto market.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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