Sei Gives Exchanges a June 15 Deadline to Drop Cosmos Addresses or Risk Locking User Funds
Exchanges and custodians that still route SEI transactions through native Cosmos addresses have just over five weeks to complete a technical migration, or their customers could lose access to their holdings permanently.
Sei Labs published a formal notice on May 7, 2026, directed at exchanges and custodians handling SEI tokens. The message is direct: all platforms must migrate customer accounts from Cosmos-format (sei1...) addresses to EVM-format (0x...) addresses before June 15, 2026. That date marks the point at which the Cosmos layer of the Sei blockchain will be fully deprecated. After that cutoff, funds sitting in unassociated native addresses become inaccessible, Cosmos RPC endpoints stop functioning, and IBC transfers, the cross-chain messaging protocol used across Cosmos-based networks, are permanently disabled. Sei Labs has not outlined any recovery mechanism.
What exchanges are actually being asked to do
The core technical insight that Sei Labs is trying to get across is one that trips up many exchange back-end systems: Sei EVM is not a separate blockchain from Sei's Cosmos layer. It is the same chain, now accessible only through an Ethereum-compatible interface. Many exchanges currently list both "Sei (native)" and "Sei EVM" as separate network entries in their internal infrastructure. That framing is incorrect and needs to be corrected before June 15.
The good news for integration teams is that no on-chain fund movement is necessarily required. Every Cosmos-format sei1... address has a mathematically linked EVM-format 0x... counterpart, derived from the same underlying keypair. In practical terms, exchanges may only need to surface the correct EVM address for each customer account rather than physically moving assets. Operators whose customers never completed the sei1-to-0x address association step, however, face a more complex path even without on-chain fund movement, and should consult the technical reference early. Sei Labs has published that reference at docs.sei.io, outlining four distinct migration options for institutional operators. Teams needing support can reach Sei Labs through Telegram's Sei Tech Chat channel or the official Discord server.
How we got here
SIP-03, or Sei Improvement Proposal 3, was passed by the Sei community in May 2025. It called for the complete removal of CosmWasm smart contract support and the Cosmos SDK execution layer, turning Sei into a pure EVM chain. Sei co-founder Jayendra Jog described the rationale as seeking "better optimization of performance, tools, and infrastructure." Running both a Cosmos stack and an EVM layer in parallel was creating tooling fragmentation and capping the network's performance ceiling. The proposal was not without opposition. One community member wrote in the GitHub SIP-3 governance discussion: "Moving from SEI's high-performance, Cosmos-native L1 to an Ethereum execution model is not progress. It's regression."
The migration has been rolling out in phases since January 2026. EVM staking went live in that month, inbound IBC transfers were disabled in February, the native oracle was replaced by Chainlink, API3, and Pyth in March, and the remaining Cosmos transaction support and CosmWasm contracts were deprecated during an April 6 to 8 window.
Coinbase was the first major exchange to publicly communicate a concrete migration plan, suspending SEI deposits and withdrawals during that April window and committing to EVM support. The June 15 deadline applies to all remaining platforms that have not yet completed the transition.
The architectural shift is a prerequisite for Sei Giga, an upcoming upgrade targeting 200,000 transactions per second with finality under 400 milliseconds. For reference, most mainnet EVM chains currently process around 4,000 transactions per second. Sei Labs has framed the Cosmos removal as the weight-reduction phase of that effort: "To make a car go really fast, you do both [increase power and reduce weight]: SIP-3 represents the weight reduction phase." The performance gains are expected to come from three specific mechanisms: parallel block proposals, the "Autobahn" multi-proposer consensus system, and asynchronous execution decoupled from consensus.
The codebase reduction involved stripping out hundreds of thousands of lines of code, one of the largest protocol simplifications seen in a live Layer 1 network.
Why this hits harder outside the US
For retail users across South Asia and Sub-Saharan Africa, the exchange-level migration deadline carries consequences that go beyond an inconvenience. Mobile-first users in India, Pakistan, Bangladesh, Sri Lanka, and Nigeria rely almost entirely on centralized exchanges to hold and move crypto assets. South and Southeast Asia accounted for 69 percent of the increase in global crypto inflows in 2025 compared to 2024. Self-custody infrastructure and technical fallback options are less accessible in these markets. If a regional or global exchange misses the June 15 deadline, those users face a complete lockout from their SEI balances with no straightforward recovery.
The stakes extend further. Sub-Saharan Africa processed more than $205 billion in on-chain value between July 2024 and June 2025, a 52 percent year-on-year increase. Stablecoins represent roughly 43 percent of all crypto transaction volume in the region.
The discontinuation of IBC, which previously enabled Cosmos-native stablecoin transfers, has already claimed its first casualties. Approximately $1.4 million in USDC via Noble (USDC.n) was in circulation on Sei at migration time. That risk materialized during the April 6 to 8 Cosmos deprecation window: users who had not converted those holdings through Circle's CCTP V2 or compatible bridging platforms before that cutoff lost access to those funds. The episode is a concrete illustration of what exchange-level non-compliance by June 15 could mean at scale.
Sei Foundation holds a partnership with Xiaomi to pre-install Sei Wallet on smartphones sold in Southeast Asia and Latin America. If that partnership expands to South Asian markets, Xiaomi's estimated 15 to 20 percent smartphone market share in India would mean a significant wave of new users arriving on exchanges that may not yet have completed their migration, potentially encountering broken deposit and withdrawal experiences from the start.
What comes next
With the June 15 deadline now under six weeks away, operators that have not yet begun the migration process are running short on time. Sei's on-chain metrics show approximately 767,100 daily EVM transactions and 656,300 active addresses, suggesting the network is already functioning primarily through its EVM interface. Sei has also claimed the top position among EVM chains by number of active users, a figure that underscores how thoroughly the transition has taken hold on the network side even as some exchanges lag behind.
SEI is currently trading at roughly $0.061, with a circulating market cap near $378 million and a fully diluted valuation around $561 million. Analysts have flagged persistent token unlock schedules as a structural headwind for price appreciation; with 5.77 billion of a total 10 billion tokens currently in circulation, nearly half of total supply remains to be unlocked. Whether the current market figures hold steady through the transition window may depend on how cleanly the remaining exchange integrations go.