ESMA Suggests Strengthening MiCA Regulations

The European Securities and Markets Authority (ESMA) has suggested multiple modifications to the MiCA bill ahead of its formal implementation. The authority is urging the European Commission to enhance the disclosure obligations for licenses within the region.

ESMA’s analysts released an official opinion on the MiCA bill, encouraging the European Commission to contemplate extending certain requirements for license seekers and intensifying oversight of crypto-asset service providers (CASP).

Specifically, the ESMA advocates for an amendment to the bill that would mandate CASPs in the region to undergo compulsory external cybersecurity audits. These audits should encompass:

• an evaluation of the reputation of the management body members;
• verifications regarding the absence of penalties, particularly in the domains of financial services and AML.

The document indicates that the enhanced requirements under MiCA will bolster the resilience of the EU crypto market. The ESMA analysts assert that only a more comprehensive evaluation of license applicants in the region will elevate the protection level for local investors.

The European Council will review the ESMA’s suggestions and determine potential amendments to the draft legislation before the year’s end.

The MiCA bill was enacted in 2023 and will be fully operational by 2026. Previously, ESMA analysts cautioned that multifunctional crypto-asset intermediaries (MCI) might utilize cryptocurrencies for offshore transactions to evade MiCA regulations.

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