Malta Rejects EU Initiative to Transfer Cryptocurrency Regulation to ESMA

Malta has expressed its opposition to a proposal from France, Italy, and Austria aimed at enhancing the authority of the European Securities and Markets Authority (ESMA) to supervise significant crypto companies throughout the EU.

Key Takeaways:

• Malta is against transferring crypto oversight to ESMA, cautioning that it would introduce unnecessary bureaucracy and diminish efficiency.
• France, Italy, and Austria advocate for granting ESMA additional powers, pointing to the inconsistent enforcement of MiCA regulations among EU nations.
• This discussion underscores the increasing friction regarding MiCA’s passporting framework, which some worry could result in regulatory gaps.

The three nations on Monday urged ESMA to assume a direct supervisory function, voicing concerns that member states might be interpreting the EU’s new Markets in Crypto-Assets (MiCA) regulation in varying ways.

This action would transfer more power from national regulators to the Paris-based ESMA.

Malta Advocates for Regulatory Coordination, Opposes Centralized EU Crypto Oversight

Malta’s Financial Services Authority (MFSA), however, stated its support for enhanced coordination among national regulators but not for centralized governance.

“We believe that centralization at this point would merely add another layer of bureaucracy, which could impede efficiency during a time when the EU is actively working to boost its competitiveness,” a spokesperson informed Reuters.

While France has been a strong proponent of a greater role for ESMA, even cautioning that it might contest crypto licenses granted by other nations, Malta seems hesitant to relinquish control.

The MFSA itself has come under scrutiny in recent months regarding its licensing procedures under MiCA.

Financial regulators throughout Europe remain split on this matter.

ESMA chair Verena Ross has indicated her openness to expanded oversight powers, but any alteration in supervisory authority would necessitate agreement among member states, which is proving challenging to achieve.

As previously reported, France has raised concerns about the inconsistent application of crypto licensing regulations across the EU, warning it may prevent firms licensed in other member states from operating domestically.

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The head of France’s AMF, Marie-Anne Barbat-Layani, has called for the transfer of oversight to ESMA to guarantee uniform supervision.

The concern revolves around the MiCA regulation’s “passporting” model, which permits crypto firms authorized in one EU nation to operate in all 27.

French regulators are apprehensive that this system may create regulatory gaps, allowing firms to take advantage of weaker oversight in certain jurisdictions as they expand throughout Europe.

ESMA Identifies Gaps in Malta’s Crypto Licensing

In July, ESMA expressed concerns regarding Malta’s crypto licensing process, following a peer review of the Malta Financial Services Authority (MFSA).

While recognizing that the MFSA has sufficient staffing and sector expertise, the review concluded that Malta only “partially met expectations” in its authorization of a crypto asset service provider (CASP), with several significant issues remaining unaddressed during the approval process.

The review, initiated in April 2025 by ESMA’s Peer Review Committee, examined the MFSA’s supervisory framework, authorization procedures, and oversight mechanisms.

ESMA highlighted that consistency among EU member states is crucial under the MiCA regulatory framework, which aims to standardize the licensing and supervision of crypto firms across the bloc.

Although the peer review specifically targeted Malta, ESMA emphasized that the findings are intended to assist all National Competent Authorities (NCAs) as they refine their CASP approval processes.

The regulator urged the MFSA to revisit unresolved issues from previous authorizations and enhance its review process in accordance with EU-wide standards.

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