ESMA Advocates for Revisions to EU’s Crypto Regulation Ahead of MiCA Deadline

ESMA has called for updates to the EU's Markets in Crypto-Assets Regulation (MiCA), emphasizing the need for regulatory adjustments.

On October 16, the European Securities and Markets Authority released a statement advocating for the European Commission to enhance key elements of MiCA.

In its opinion, ESMA highlighted the importance of two specific regulatory technical standards (RTS) related to disclosures for crypto asset service providers (CASPs). Among the proposed changes is a requirement for CASP applicants to submit external cybersecurity audit results, along with assessments of their management teams’ integrity.

ESMA’s aim is to improve the entry assessment process for entities wishing to provide crypto services in the EU, ultimately enhancing market resilience and investor protection. The authority has communicated its recommendations to the European Commission, Parliament, and Council, noting that the Council can either accept or reject these amendments.

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As the December 30 deadline for finalizing MiCA approaches, ESMA is aware of concerns from the crypto industry regarding potential risks to the banking system and stablecoin operations stemming from certain MiCA provisions. The authority is engaged in ongoing discussions with market participants to address these issues.

Alexander Zdravkov