ESMA Releases Report on Crypto Assets Regulation in EU

The European Securities and Markets Authority (ESMA) has reached the final phase of establishing a regulated environment for crypto assets in the EU with the release of its latest report on the Markets in Crypto Assets (MiCA) regulation.

ESMA has submitted the report to the European Commission, the executive arm of the 27-member bloc. The commission will provide further advice and technical guidance in this area if requested.

The report covers key policies such as the information required for the authorization of crypto-asset service providers (CASPs), the process for financial entities to notify their intent to offer crypto-asset services, standards for assessing noteworthy acquisitions in CASPs, and the mechanisms for handling complaints within such entities.

One of the main goals of the report is to ensure a level playing field for all market participants, promoting fair competition among CASPs and enhancing investor protection throughout the EU.

The Securities and Markets Stakeholder Group of ESMA has supported this goal, advocating for equal regulatory scrutiny for both traditional financial intermediaries and those providing crypto-asset services. The group has recommended a “two-track approach” for the notification and authorization processes to streamline regulatory requirements for all entities involved.

ESMA has also announced its third consultation package seeking public feedback on proposed rules targeting the detection and reporting of suspected market abuse in the crypto sector. The consultation will also evaluate policies for crypto-asset transfer services, establish suitability requirements for certain crypto-asset services, and enhance ICT operational resilience for firms under MiCA.

Comments on the consultation will be accepted until June 25, 2024. The European Banking Authority (EBA) has been actively consulting on MiCA regulation measures since its finalization in 2023, collaborating with ESMA to announce draft regulations for multi-currency stablecoins issuers in March.

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