Blocking of USDT cryptocurrency token explained in the European Union

The European Securities and Markets Authority (ESMA) has clarified the legal status of Tether USDT stablecoins, which do not comply with some provisions of the European Crypto Asset Markets Act (MiCA), which has been in force since the end of last year.

ESMA stated that the EU authorities do not see any violations in the provision of services for the storage and transfer of any stablecoins. In an interview with Cointelegraph, a representative of the regulator confirmed that, according to ESMA’s definition, USDT stablecoins are a non-compliant asset. However, according to the MiCA, the custody and transfer services of such non-compliant stablecoins do not constitute a «public offer» or «admission to trading» in themselves.

«Thus, these services are not prohibited under Titles III and IV of the MiCA,» the source said.

At the same time, ESMA clarified that although deposits and withdrawals of such stablecoins are not explicitly prohibited, European crypto asset management service providers (CASPs) should strive to strictly control services that facilitate the acquisition of such assets. This requirement is spelled out in the ESMA recommendations published on January 17, 2025.

Earlier, Binance, the world’s largest crypto exchange, announced that starting March 31, it will stop supporting USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC, and PAXG trading pairs for customers from the European Economic Area.