Can EU Exchanges Still List USDT, DAI and USDS Under MiCA? The Legal Debate Explained

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COMPLIANCE ALERT

MiCA’s stablecoin provisions have been fully applicable since 30 June 2024 for EMT and ART issuers, and since 30 December 2024 for CASPs. Whether EU-licensed exchanges can continue listing non-MiCA-compliant stablecoins such as USDT, DAI, and USDS remains one of the most consequential unsettled questions in European crypto regulation. ComplyFactor’s MiCA advisory and MLRO services are available to help CASPs navigate these obligations. Contact us here.

1. Why This Question Matters Right Now

On 30 December 2024, the Markets in Crypto-Assets Regulation — Regulation (EU) 2023/1114, universally known as MiCA — became fully applicable across the European Union and the European Economic Area. For crypto-asset service providers (CASPs), including centralised exchanges operating in the Union, this date marked the moment at which the full weight of MiCA’s CASP authorisation and operating obligations came into force.

Within days of that date, a fault line that had been building in the EU crypto legal community cracked open publicly. The question was deceptively simple: can a MiCA-authorised centralised exchange (CEX) continue to list stablecoins like Tether’s USDT, MakerDAO/Sky Protocol’s DAI, and its successor USDS — all of which are pegged to the US Dollar but whose issuers are not authorised as credit institutions or electronic money institutions under MiCA — without breaching EU law?

The stakes are enormous. USDT alone accounts for the vast majority of global stablecoin trading volume. DAI has been a cornerstone of decentralised finance since 2017. USDS, its successor token under the Sky Protocol rebrand, carries the same economic footprint. If EU-licensed exchanges are legally required to delist all three, the impact on European crypto markets would be immediate and severe. If they are permitted to continue listing them, the question of what regulatory obligations apply — and to whom — becomes operationally critical for every compliance officer at a MiCA-regulated entity.

In January 2025, the European Securities and Markets Authority (ESMA) issued a public statement effectively directing trading platforms to delist non-MiCA-compliant ARTs and EMTs. On the same day, a detailed 98-page legal opinion commissioned by the Sky DAO — authored by BCAS Legal, a Malta-based crypto regulatory firm — reached the precise opposite conclusion. The debate has not been resolved since, and compliance teams across the EU are navigating the resulting uncertainty in real time.

This article breaks down the legal argument in full, explains why reasonable experts disagree, and sets out what CASPs operating under MiCA should be doing right now.

2. How MiCA Classifies Stablecoins: The EMT Framework

MiCA establishes three categories of crypto-assets within its regulatory perimeter:

Asset-Referenced Tokens (ARTs) purport to maintain a stable value by referencing a basket of assets, multiple currencies, commodities, or a combination thereof. Title III of MiCA governs ARTs. The regulatory requirements for ART issuers are among the most demanding in the Regulation, requiring prior authorisation from a national competent authority (NCA) and extensive ongoing obligations.

Electronic Money Tokens (EMTs) purport to maintain a stable value by referencing the value of one official currency — meaning a single fiat currency issued by a central bank. Title IV of MiCA governs EMTs. An EMT issuer must be authorised as either a credit institution or an electronic money institution, and must publish and notify a MiCA-compliant whitepaper to their NCA.

Other crypto-assets — everything that is not an ART, EMT, financial instrument, or otherwise excluded from MiCA’s scope — fall under Title II.

Two points of drafting principle are worth anchoring from the outset. First, the classification as an EMT turns solely on the crypto-asset’s design to maintain a stable value against one official currency — not on its reserve composition, its collateralisation mechanism, or whether it actually succeeds in maintaining that peg. Recital 41 of MiCA makes this explicit, confirming that algorithmic stablecoins aiming to maintain a stable value against an official currency fall within the EMT definition regardless of their technical architecture.

Second, MiCA draws a sharp and consequential distinction between the act of issuing a crypto-asset and the act of offering it to the public or seeking its admission to trading. As we will see, this distinction sits at the heart of the current legal controversy.

For a comprehensive overview of MiCA’s full framework, including its CASP authorisation requirements, whitepaper obligations, and timeline of applicability, see ComplyFactor’s MiCA Regulation Guide 2026.

3. DAI, USDS and USDT: Their Classification Under MiCA

DAI is a decentralised stablecoin created by the MakerDAO protocol — now rebranded as the Sky Protocol — and is designed to maintain a soft peg to the US Dollar. The MakerDAO whitepaper itself describes DAI as “a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the US Dollar.” Despite its algorithmic and over-collateralised architecture, DAI meets the definitional threshold for an EMT under MiCA: it references one official currency (the USD) and is designed to maintain a stable value against it. Reserve composition and collateralisation mechanism are irrelevant to the classification.

USDS is DAI’s successor token under the Sky Protocol rebrand. It is likewise a US Dollar soft-pegged stablecoin. DAI holders can upgrade their tokens to USDS at a 1:1 ratio. USDS meets the same definitional criteria as DAI and similarly qualifies as an EMT referencing one official currency of a non-EU Member State.

USDT (Tether) is the world’s largest stablecoin by market capitalisation, designed to maintain a 1:1 peg to the US Dollar. Tether Limited, its issuer, is not authorised as a credit institution or EMI anywhere in the EU/EEA. USDT is therefore an EMT whose issuer has not complied with Title IV of MiCA.

None of the issuers of these three tokens — Sky DAO (in respect of DAI/USDS) or Tether Limited (in respect of USDT) — hold MiCA authorisation as credit institutions or EMIs in the Union. This is the source of the regulatory tension.

It is worth noting that the classification exercise does not ask whether the issuer is EU-based or EU-regulated. An EMT remains an EMT whether its issuer is in Malta, the Cayman Islands, or anywhere else. What changes depending on the issuer’s location and conduct is the applicability of MiCA’s Title IV obligations — and this is where the legal debate becomes technically dense.

4. The Two Regulatory Triggers: Offer to the Public and Admission to Trading

Title IV of MiCA — which governs EMTs — does not impose its obligations on every person who has any connection to an EMT. It imposes obligations specifically on persons who engage in one of two regulated acts within the Union:

Trigger 1 — Offering an EMT to the public in the Union. MiCA Article 48(1) states that a person shall not make an offer to the public of an EMT within the Union unless that person is the issuer, is authorised as a credit institution or EMI, and has notified a MiCA-compliant whitepaper to the competent authority.

MiCA defines an “offer to the public” as a communication to persons in any form, presenting sufficient information on the terms of the offer and the crypto-assets to be offered so as to enable prospective holders to decide whether to purchase those crypto-assets. This is a narrow, contract-law-adjacent definition. It requires a solicitation — an intention to form a purchase contract. Educational content, yield product descriptions, and borrowing/lending interfaces generally do not meet this threshold.

Trigger 2 — Seeking the admission of an EMT to trading on a trading platform in the Union. Article 48(1) equally prohibits a person from seeking the admission to trading of an EMT within the Union unless the same conditions are met.

Both triggers share a critical characteristic: they require a person to actively undertake those acts. The issuer must be conducting an offer, or seeking admission. Where neither activity is occurring — where an issuer is simply issuing, and where exchanges list independently — the applicability of Title IV’s obligations to the issuer becomes, at minimum, debatable.

The EMD II Dimension

The ESMA and Commission publications also suggest that all EMT issuers must be authorised in accordance with the Electronic Money Directive II (EMD II), which prohibits the issuance of electronic money in the Union by any person not authorised to do so. The BCAS opinion rebuts this directly: the EMD II by its own terms applies only to issuers located in the Union. Applying it to issuers established outside the EU would be a ultra vires extension of EU law beyond its jurisdictional limits. Issuers of EMTs not located in the Union do not require EMD II authorisation, and if they are not offering to the public in the Union or seeking admission to trading, they do not require MiCA Title IV authorisation either.

The Article 48(2) Euro-Peg Exception

One important clarification must be noted for completeness. Article 48(2) of MiCA creates a specific and categorical exception for EMTs referencing the value of an official currency of an EU Member State — meaning Euro-pegged stablecoins. Any EMT that references the Euro (or another EU Member State currency) is deemed to be offered to the public in the Union upon its issuance, regardless of whether the issuer has actually conducted any offer or sought any listing. This means that even an extra-EU issuer of a Euro-stablecoin would automatically fall within Title IV’s scope.

This exception does not apply to DAI, USDS, or USDT. All three reference the US Dollar — an official currency of a non-EU Member State. The automatic-offer-to-the-public deemed provision of Article 48(2) therefore does not apply to them, which is itself a relevant factor supporting the BCAS analysis in respect of these specific tokens.

5. What “Admission to Trading” Actually Means

Before turning to the controversy, it is worth precisely defining the terms. “Admission to trading” in MiCA means the listing of a crypto-asset on a trading platform for crypto-assets — in plain terms, making a token available to be bought and sold on a centralised exchange’s order book. This is what the market commonly refers to as a “listing.”

MiCA Article 3(1)(18) defines a trading platform as one or more multilateral systems that bring together multiple third-party purchasing and selling interests in crypto-assets in a way that results in a contract. A standard centralised exchange with an automated central limit order book (CLOB) — Binance, Coinbase, Kraken, and the like — clearly meets this definition.

Critically, not every CASP operates a trading platform. A CASP offering custody, or exchange of crypto-assets for funds (without operating a multilateral system), or transfer services, does not admit crypto-assets to trading in the legal sense. For those CASPs, the admission-to-trading framework simply does not apply — they are offering crypto-asset services in relation to an asset, not admitting it to trading. This distinction has practical significance for how CASPs structure their product offerings in the current environment.

6. The Critical Distinction: Seeking Admission vs. Own-Initiative Listing

MiCA recognises two fundamentally different scenarios in which a crypto-asset ends up on a trading platform:

Scenario A — Seeking Admission to Trading: A person — typically the issuer or a distributor acting with the issuer’s consent — proactively approaches a trading platform and applies for the crypto-asset to be listed. Under MiCA, this act of seeking admission triggers the full Titles III and IV obligations. The person seeking admission must be the issuer, must be authorised as appropriate, and must have a compliant whitepaper published and notified.

Scenario B — Admission on the Own Initiative of the Trading Platform: The exchange itself unilaterally decides to list a crypto-asset without any request, application, or solicitation from the issuer or anyone associated with them. No one has sought the listing — the exchange has simply decided to offer it.

MiCA Article 5(2), under Title II (which governs non-stablecoin crypto-assets), explicitly recognises the second scenario and imposes specific obligations on trading platforms that list crypto-assets on their own initiative where a whitepaper has not been published. Recital 32 of MiCA likewise references this concept.

The legal controversy is precisely about whether this distinction — clearly present in Title II — extends to EMTs governed by Title IV. The text of Article 48(1) does not contain an equivalent provision to Article 5(2). Whether that textual silence means the distinction does not apply to EMTs (ESMA’s view), or that it means the legislature deliberately left own-initiative EMT listings unregulated (BCAS’s view), is the live and unresolved interpretive question.

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PRO TIP

CASPs should document meticulously whether a listing was initiated by the project team or by the exchange’s own internal listing committee. The direction of initiation is not merely a procedural detail — under the BCAS interpretation it is the determinative legal fact. Maintaining clear internal records of who first approached whom, and when, could prove decisive in any future NCA review or enforcement action.</p> </div>

7. The BCAS Legal Opinion: The Case for Own-Initiative Listings

In January 2025, BCAS Legal — a Maltese crypto regulatory consultancy — published a 98-page legal opinion commissioned by the Sky DAO, addressing whether DAI and USDS could remain listed on EU/EEA centralised exchanges after 30 December 2024. The opinion was authored by JG, a lawyer with deep MiCA expertise, and represents the most detailed published argument in favour of the permissibility of own-initiative EMT listings.

The BCAS argument proceeds through several interlocking steps:

Step 1 — DAI and USDS are EMTs. Both tokens are designed to maintain a stable value against the US Dollar, a single official currency. Per MiCA’s definition and Recital 41, they qualify as EMTs regardless of their collateralisation mechanism or algorithmic architecture. This classification is not contested.

Step 2 — The Title IV obligations attach only to issuers offering to the public or seeking admission to trading. Article 48(1) is conditional in its structure. The obligation to be authorised as a credit institution or EMI, and to publish a compliant whitepaper, applies only to persons who are making an offer to the public or seeking admission to trading of an EMT within the Union. An issuer who does neither is not in breach of MiCA — they are simply outside its Title IV scope.

Step 3 — The Sky DAO is not conducting an offer to the public. An offer to the public requires a communication containing sufficient information on both the crypto-assets and the terms of the offer, enabling a prospective holder to decide whether to purchase those crypto-assets. The Sky Protocol’s sky.money interface allows users to upgrade DAI to USDS, borrow USDS against collateral, and deposit USDS to earn yield — none of which constitute a contract of purchase. There are no terms of an offer to sell. The DAO cannot be a seller, because users obtain Sky Stablecoins through permissionless minting and collateral-backed borrowing, not through a purchase transaction.

Step 4 — The Sky DAO has not sought admission to trading. Sky Stablecoins were admitted to trading by centralised exchanges acting entirely on their own initiative. No governance token holder or affiliated party applied to any trading platform for a listing.

Step 5 — Own-initiative listings are not prohibited by Titles III or IV. MiCA Article 5(2) and Recital 32 explicitly recognise and regulate the concept of admission to trading on the own initiative of the trading platform operator. The legislator chose to impose specific obligations in Title II for such self-admissions, but did not mirror that provision in Titles III or IV. Applying the Latin maxim ubi lex voluit dixit, ubi noluit tacuit — where the law willed it, it spoke; where it did not, it was silent — the BCAS opinion argues that the absence of an equivalent prohibition in Title IV means that own-initiative listings of EMTs are not prohibited, provided the CASP meets its Title V obligations.

Step 6 — The CASP must still meet its Title V obligations. Even under this permissive reading, the trading platform is not without obligations. It must conduct a suitability assessment under Article 76(2), covering technical reliability, potential fraud and AML risks, and the issuer’s track record. It must have operating rules establishing token approval processes and AML/KYC requirements commensurate with ML/TF risk per Article 76(1)(a). It must provide clients with hyperlinks to any available whitepaper under Article 66(3). And it must publish information on the environmental impact of Ethereum’s consensus mechanism under Article 66(5).

The BCAS conclusion is that, as of the date of the opinion, nothing in MiCA precluded CASPs from continuing to offer services in relation to DAI and USDS — including trading platform operators listing them on their own initiative — provided full Title V compliance is maintained.

8. ESMA’s January 2025 Statement: The Counter-Position

On 17 January 2025, ESMA issued a public statement on the provision of certain crypto-asset services in relation to non-MiCA-compliant ARTs and EMTs. On the same day, the European Commission published a Q&A document on the same subject. Together, these publications represent the supervisory establishment’s official position.

ESMA’s statement and the Commission’s Q&A made several material assertions that directly contradict the BCAS analysis:

First, both publications effectively treat any ART or EMT whose issuer is not authorised under MiCA as “non-MiCA compliant” — implying that the mere existence of an unauthorised issuer places the token in a problematic regulatory category. The BCAS opinion challenges this characterisation directly: an issuer that is not offering to the public or seeking admission to trading in the Union is not in breach of MiCA, and cannot accurately be described as “non-compliant.” MiCA does not have global applicability. Describing an external issuer who has never engaged with EU markets as “non-compliant” misreads the regulation’s jurisdictional scope.

Second, ESMA’s statement directed CASPs operating trading platforms to stop making all non-MiCA-compliant ARTs and EMTs available for trading. This instruction treats own-initiative admissions to trading as falling within the same regulatory prohibition as “seeking admission to trading” — precisely the interpretive step that BCAS contests.

Third, the Commission’s Q&A suggested that operators of trading platforms listing ARTs or EMTs for which the issuer has not been authorised are to be considered as persons “seeking admission to trading on the own initiative of the operator” under Articles 16(1) and 48(1). The BCAS opinion argues this reading conflates two distinct legal concepts that the legislator deliberately separated. Article 5(2) and Recital 32 demonstrate that the legislator knew how to address own-initiative listings when it wanted to — and chose not to import that concept into Titles III or IV.

Fourth, the Commission’s Q&A indicated that other crypto-asset services — including exchange of crypto-assets for funds — may constitute an offer to the public of non-MiCA-compliant ARTs and EMTs if the relevant CASPs promote or advertise those tokens as part of their service offering. This narrower point is largely uncontested: advertising or promoting a non-compliant EMT to EU users is a materially different act from neutrally offering it as part of a broad trading catalogue.

It is important to note the legal character of these publications. ESMA’s public statement and the Commission’s Q&A are not legally binding instruments. They are supervisory guidance and interpretive positions. They do not have the force of law equivalent to the MiCA Regulation itself, and NCAs across the EU are not legally obliged to follow them, though in practice most will treat them as authoritative expressions of regulatory intent.

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COMMON MISTAKE

Many compliance officers are treating ESMA’s January 2025 public statement as if it carries the same legal weight as the MiCA Regulation itself. It does not. Public statements and Q&A documents from ESMA and the Commission are interpretive positions — they are persuasive but not legally binding on NCAs or courts. A CASP that relies exclusively on the ESMA statement to justify delisting decisions, without engaging with the underlying statutory text, is making a compliance decision on incomplete analysis. Conversely, a CASP that relies solely on the BCAS opinion without accounting for the regulatory risk of ESMA’s contrary position is equally exposed.</p> </div>

9. Where the Law Is Actually Silent — and Why That Matters

The most technically precise way to frame the dispute is to identify exactly where MiCA is silent and ask what that silence means.

MiCA Title II, Article 5(2) states: “When a crypto-asset is admitted to trading on the initiative of the operator of a trading platform and a crypto-asset white paper has not been published in accordance with Article 9 in the cases required by this Regulation, the operator of that trading platform for crypto-assets shall comply with the requirements set out in paragraph 1 of this Article.”

Recital 32 supports this, stating that the operator of a trading platform should be responsible for complying with the requirements of Title II where crypto-assets are admitted to trading on its own initiative.

There is no equivalent provision in Title III (ARTs) or Title IV (EMTs). The concept of “own-initiative admission” appears explicitly in the context of Title II assets, and nowhere else.

There are two plausible readings of this silence:

Reading A (BCAS): The legislature deliberately chose to address own-initiative listings only in Title II. Had it intended to prohibit own-initiative listings of EMTs, it would have done so expressly — just as it did for Title II assets in Article 5(2). The silence is intentional. Own-initiative listings of EMTs are therefore not prohibited, and the ubi lex voluit maxim supports this conclusion.

Reading B (ESMA / Counter-position): The silence means only that the specific Article 5(2) mechanism — whereby the trading platform assumes the whitepaper obligation — does not apply to EMTs. It does not mean that own-initiative listings are affirmatively permitted. The categorical language of Article 48(1) — prohibiting any person from making an offer to the public or seeking admission to trading of a non-compliant EMT — is broad enough to capture trading platform own-initiative admissions, particularly given that the Commission’s Q&A characterises such admissions as falling within the Article 48(1) prohibition.

The honest assessment is that both readings are textually available. Reading A has the advantage of structural coherence with the legislature’s demonstrably deliberate architecture of distinguishing between issuers/offerors and trading platforms. Reading B has the advantage of regulatory pragmatism and aligns with ESMA’s expressed supervisory intent. Neither is clearly wrong as a matter of pure statutory interpretation.

What does appear clear is that the eventual authoritative answer will come from either a formal ESMA supervisory convergence mechanism, a binding NCA enforcement decision that is tested through the courts, or ultimately the Court of Justice of the European Union. Until then, compliance teams are operating in genuine legal ambiguity.

10. What CASPs Must Do Regardless of the Debate {#casp-obligations}

Whatever position a CASP ultimately takes on the own-initiative listing question, MiCA Title V imposes a set of non-negotiable obligations on any CASP operating a trading platform that admits any crypto-asset — including EMTs — to trading. These obligations apply universally and are not affected by the interpretive dispute:

Suitability Assessment (Article 76(2)): Before admitting any crypto-asset to trading, a CASP operating a trading platform must undertake a suitability assessment covering: technical reliability of the token’s infrastructure; potential association with illicit or fraudulent activities; the experience, track record, and reputation of the issuer and development team; and compliance with the platform’s own operating rules. This obligation applies to all crypto-assets regardless of whether a MiCA-compliant whitepaper exists.

Operating Rules and AML/KYC Requirements (Article 76(1)(a)): The platform must have formal operating rules setting out the approval process for admitting crypto-assets to trading, including customer due diligence requirements commensurate with the ML/TF risk presented by the applicant, in accordance with the EU AML Directives. For stablecoins with significant DeFi and cross-border usage like USDT, DAI, and USDS, this risk assessment must be substantive and documented.

Whitepaper Reference (Article 66(3)): CASPs operating trading platforms, exchange services, advisory services, and portfolio management must provide clients with hyperlinks to any available crypto-asset whitepaper for the tokens in relation to which they provide services. The BCAS opinion confirms this obligation applies to any whitepaper — not exclusively MiCA-compliant ones. The MakerDAO whitepaper, the Sky Protocol documentation, and Tether’s reserve attestations are all relevant reference materials.

Environmental Disclosure (Article 66(5)): All CASPs must publicly disclose on their website information about the principal adverse environmental impacts of the consensus mechanism used to issue each crypto-asset in relation to which they provide services. For DAI, USDS, and USDT — all issued on Ethereum — this means disclosing information about Ethereum’s Proof-of-Stake consensus mechanism and its environmental footprint.

CASPs that are uncertain about their MiCA compliance posture across these obligations should seek specialist advisory support. ComplyFactor’s AML compliance programme services and global MLRO services are specifically structured to support CASPs navigating MiCA implementation, including token admission frameworks and AML programme design. Our MiCA compliance guide also provides a comprehensive operational reference.

11. The Divergent Market Responses {#market-responses}

The legal uncertainty has produced starkly different responses across EU-regulated trading platforms, which themselves reflect the genuine interpretive divide.

Bitpanda — a Vienna-based exchange with full MiCA authorisation — delisted USDT entirely, citing the ESMA statement and its own legal assessment that operating a trading platform for a non-MiCA-compliant EMT created unacceptable regulatory risk, regardless of whether the listing was exchange-initiated.

Revolut presents a more nuanced picture. Revolut has been authorised as a trading platform in one jurisdiction, but its broader payments and exchange app is not a trading platform in the MiCA sense. USDT was removed from Revolut X (the trading platform product) but retained on the vanilla Revolut app (which offers exchange services rather than operating a multilateral order book). This structuring is entirely consistent with the legal analysis: the admission-to-trading framework applies only to CASPs operating trading platforms, and a CASP offering exchange of crypto-assets for funds without a multilateral order book system is providing a different service entirely.

Several other exchanges have maintained USDT, DAI, and USDS listings while ESMA’s statement has been processed by their legal teams, treating the matter as unresolved pending further regulatory clarity.

This divergence is itself legally significant. It demonstrates that NCAs in different member states are not uniformly enforcing ESMA’s statement, which reinforces the view that the statement is not binding and that genuine interpretive space exists.

For a broader view of how EU crypto regulation is evolving for CASPs and VASPs, including the Travel Rule, DORA, and the upcoming AML Regulation, ComplyFactor’s 6 AML Trends analysis and VASP compliance guide are essential reading.

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INDUSTRY INSIGHT

The divergent market responses to the ESMA statement are not simply commercial decisions — they reflect fundamentally different legal risk appetites. Exchanges that delisted USDT eliminated regulatory risk but accepted significant commercial loss. Exchanges that maintained listings are effectively placing a legal wager that the BCAS interpretation will ultimately prevail, or that NCAs will not enforce aggressively in the near term. Neither position is irrational. What is irrational is making either decision without documented legal analysis and board-level sign-off.</p> </div>

12. What Happens if Sky DAO or Tether Seek Admission to Trading?

The BCAS opinion contains an important warning that is frequently overlooked in commentary on this debate. Even if own-initiative listings are permissible today, the analysis changes entirely if the issuer — or governance token holders — takes any action that could be characterised as seeking admission to trading.

The BCAS opinion is explicit: if Sky Stablecoins were delisted by a trading platform, any attempt by the governance token holders to seek their re-admission would constitute an act of “seeking admission to trading” under Article 48(1), triggering the full Title IV obligations. The direction of initiation matters absolutely.

More subtly, the BCAS opinion warns that the Sky DAO — meaning the MKR and SKY governance token holders — must not approach newly-authorised CASPs requesting listings. If they do so, they risk the entire “own-initiative” legal analysis collapsing. Conversely, if a newly-authorised CASP reaches out to the Sky DAO with technical clarificatory questions about the Sky Stablecoins, the Sky DAO responding to those questions does not constitute “seeking” admission to trading — the seeking must come from the issuer’s side.

This operational boundary has direct compliance implications for any protocol or token issuer operating in the EU space: once the “seeking” characterisation attaches, there is no walking it back.

For Tether — as a centralised, clearly identifiable legal entity — the analysis is even starker. Unlike the Sky Protocol, which presents a genuine decentralisation argument, Tether Limited is an identifiable issuer as a matter of straightforward corporate law. The non-identifiable issuer carve-out under Recital 22, which may provide some analytical protection for the Sky DAO, categorically does not apply to USDT. If Tether were ever to seek listings on EU-licensed platforms, or if it were found to have been conducting an offer to the public in the Union, the full Title IV authorisation requirements — EMI or credit institution status, MiCA-compliant whitepaper, NCA notification — would apply immediately and without the ambiguity that surrounds the Sky Protocol analysis.

13. The Non-Identifiable Issuer Question

One of the most analytically rich sections of the BCAS opinion concerns whether the Sky DAO — as a decentralised autonomous organisation governed by approximately 101,784 holders of MKR and SKY governance tokens — qualifies as an “identifiable issuer” under MiCA.

MiCA Recital 22 states that crypto-assets with non-identifiable issuers fall outside the scope of Titles III and IV. If no single person or entity has control over the issuance of a crypto-asset, there may be no identifiable issuer, and accordingly no entity to bear the Title IV obligations.

The BCAS opinion takes the view that, at first glance, the Sky Protocol is sufficiently decentralised that the governance token holders collectively may constitute a non-identifiable issuer — particularly given that, as at January 2025 (the date of the BCAS opinion), there were approximately 101,784 holders of MKR and SKY governance tokens, with individual holders having no direct control over Sky Stablecoins held by other users, and the ability to halt issuances being largely limited to abnormal circumstances. Under this interpretation, the Sky Stablecoins and their issuers would fall outside Title IV’s scope entirely, per Recital 22.

However, the BCAS opinion is candid about the limits of this analysis. The term “non-identifiable issuer” is not defined anywhere in MiCA’s operative text. The legislator provides no parameters for what level of decentralisation suffices. The opinion notes that the governance token holders’ collective ability to control key protocol parameters — including debt ceilings, stability fees, emergency shutdowns, and USDS contract upgrades — could support a finding that they are identifiable issuers when viewed as a collective. The BCAS conclusion on this point is offered on a balance of probabilities, not with certainty.

This ambiguity has a broader significance. It reflects an acknowledged gap in MiCA’s framework: the Regulation was drafted with centralised issuers in mind, and its application to genuinely decentralised protocols remains deeply uncertain. The Commission’s Article 142(1) report on DeFi developments, delivered in January 2025, and the forthcoming Article 142(2) report due by 30 June 2027, represent the legislature’s acknowledgment that this gap exists and needs to be addressed.

14. The DeFi Horizon: MiCA’s Article 142 Report

MiCA’s Title IX contains a forward-looking provision that is directly relevant to the DAI/USDS question. Article 140(2)(t) requires the Commission, after consulting EBA and ESMA, to produce two reports covering “decentralised finance in markets in crypto-assets,” with the second due by 30 June 2027.

The first of these reports was delivered on 16 January 2025, assessing recent developments in DeFi, including the appropriate regulatory treatment of “decentralised crypto-asset systems without an issuer or crypto-asset service provider.” This report explicitly acknowledges that DeFi is not currently within MiCA’s scope in the way centralised crypto-asset activities are — and that a dedicated legislative proposal may follow.

For compliance professionals, this DeFi horizon matters in several ways. First, it confirms that the current regulatory framework was not designed with protocols like the Sky Protocol in mind, and that applying it to such protocols requires interpretive stretching that courts and NCAs may not sustain. Second, it signals that the regulatory perimeter is likely to expand specifically to capture decentralised protocols, potentially including those issuing stablecoins, in a future legislative cycle. Third, it provides a useful framing for compliance teams at exchanges that have listed DeFi protocol tokens: the regulatory treatment of these assets is genuinely unresolved at the legislative level, not merely at the interpretive level.

For CASPs building their MiCA compliance frameworks, particularly in relation to DeFi-adjacent products, ComplyFactor’s AML advisory services and complete AML programme blueprint provide a structured foundation for navigating these evolving obligations.

15. Practical Guidance for CASPs in 2025 and 2026

Given the unresolved legal landscape, what should compliance officers at MiCA-licensed CASPs actually do?

Conduct and document a formal legal risk assessment. The decision to list or delist USDT, DAI, USDS, or any other non-MiCA-compliant EMT or ART is a legal risk decision that must be made with appropriate analysis and board-level sign-off. Neither the BCAS opinion nor the ESMA statement should be adopted as a ready-made answer without engaging with the underlying statutory text and the specific circumstances of your platform.

Implement Article 76 suitability assessments for all listed tokens. Regardless of which side of the interpretive debate you land on, Article 76(2) requires a pre-listing suitability assessment for every crypto-asset. For DAI, USDS, and USDT, this should cover technical reliability (the Sky Protocol has been audited extensively by ChainSecurity and Cantina; Tether publishes reserve attestations), AML/fraud risk assessment, and issuer track record. Document everything.

Establish a formal token listing policy. Article 76(1)(a) requires operating rules that set out the approval processes for admitting crypto-assets to trading. If your exchange does not have a written token listing policy that addresses the MiCA Article 76 criteria, this is a priority gap to close.

Assess your specific CASP service type. If your platform offers exchange of crypto-assets for funds without operating a multilateral order book, you may not be operating a trading platform in the MiCA sense. The admission-to-trading framework may not apply to your specific service. This structural question should be addressed in your legal analysis.

Monitor NCA enforcement across member states. Given that NCAs are not uniformly enforcing ESMA’s statement, it is worth tracking enforcement developments in your home member state specifically. An NCA that has publicly endorsed ESMA’s position presents a different risk profile than one that has remained silent.

Do not promote or advertise non-compliant EMTs. The Commission’s Q&A is clear that promotional and advertising activity in relation to non-MiCA-compliant stablecoins can itself constitute an offer to the public, regardless of the underlying listing status. Passive listing is categorically different from active promotion. Your marketing and product copy should be reviewed in this light.

Prepare for the XBRL taxonomy. Commission Implementing Regulation (EU) 2984 is expected to require whitepapers to comply with ESMA’s MiCA XBRL taxonomy to be included in the ESMA register — industry discussions have referenced a December 2025 applicability date, though CASPs should confirm the precise implementation timeline directly against the published Implementing Regulation. Tokens without taxonomy-compliant whitepapers will not appear in the register — which will itself create secondary compliance pressure around listings. CASPs should build this into their forward-looking token admission frameworks now.

Summary Table: The Legal Positions at a Glance

Issue	BCAS / JG	ESMA / Commission
Can a CEX list DAI/USDS/USDT on own initiative?	Yes — own-initiative listings not prohibited under Titles III/IV	No — equivalent to seeking admission to trading
Is an unauthorised EMT issuer “non-MiCA compliant”?	Not if they haven’t offered to the public or sought listing in the Union	Yes — non-authorised = non-compliant
Does Article 5(2) extend to EMTs?	No — Title II only; silence in Title IV is deliberate	Implicitly yes via Article 48(1)’s broad prohibition
Is the Sky DAO an identifiable issuer?	Probably not — 101,784+ governance token holders	Question unresolved
Is ESMA’s statement legally binding?	No — supervisory guidance only	Authoritative expression of regulatory intent
What Title V obligations apply regardless?	Articles 66(3), 66(5), 76(1)(a), 76(2) — non-negotiable	Same

16. Frequently Asked Questions

Q: Is USDT now banned on EU exchanges?
A: Not unambiguously. ESMA’s January 2025 statement directed trading platforms to delist non-MiCA-compliant EMTs including USDT, but this statement is not a legally binding regulation. Some exchanges have delisted USDT; others have not. The legal basis for mandatory delisting is contested, and the matter has not been resolved by binding court or supervisory decision.

Q: Can I still use USDT on a non-trading-platform CASP in the EU?
A: Yes, provided the CASP does not promote or advertise USDT as part of its service offering. The admission-to-trading framework applies only to CASPs operating trading platforms (multilateral order book systems). CASPs offering exchange of crypto-assets for funds without a trading platform can generally offer USDT-related services without the admission-to-trading analysis applying.

Q: Does DAI’s algorithmic, over-collateralised architecture mean it isn’t an EMT?
A: No. MiCA’s EMT definition turns on the crypto-asset’s design to maintain a stable value against one official currency. Reserve composition, pegging mechanism, and collateralisation structure are irrelevant to the classification. Recital 41 expressly confirms this, including for algorithmic stablecoins.

Q: If the Sky DAO is a non-identifiable issuer, does Title IV not apply at all?
A: Under the BCAS interpretation, a finding of non-identifiable issuer status would place the Sky Stablecoins outside Title IV’s scope entirely, per Recital 22. However, CASPs providing services in respect of such crypto-assets would still be covered by MiCA’s Title V obligations. The non-identifiable issuer question is genuinely unresolved.

Q: What is the risk of continuing to list USDT if my NCA follows ESMA’s position?
A: This is jurisdiction-specific. If your home member state NCA has publicly aligned with ESMA’s position, continuation of USDT listings on a trading platform creates a material enforcement risk. If your NCA has been silent or has indicated a more permissive approach, the risk profile is different. Legal advice specific to your jurisdiction is essential.

Q: When will there be regulatory certainty on this question?
A: A definitive resolution will require either: a formal ESMA regulatory technical standard or opinion that is legally binding on NCAs; a binding NCA enforcement decision that is tested through administrative or judicial review; or a Court of Justice of the European Union ruling on the correct interpretation of Articles 5(2), 16(1), and 48(1). None of these is imminent. The Commission’s Article 142 DeFi report may accelerate legislative intervention for decentralised protocols specifically, but that process extends to at least 2027.

This article is published for informational purposes and does not constitute legal advice. The legal analysis draws on publicly available sources including Regulation (EU) 2023/1114 (MiCA), the BCAS Legal Opinion on the admission to trading of USDS and DAI (January 2025), ESMA’s Public Statement on non-MiCA compliant ARTs and EMTs (January 2025), and the European Commission’s Q&A published on the same date. CASPs should seek independent legal advice specific to their jurisdiction and business model before making compliance decisions in relation to stablecoin listings.

For MiCA compliance advisory, CASP AML programme development, fractional MLRO services, and MiCA readiness assessments, contact ComplyFactor.

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