The
European Securities and Markets Authority (ESMA) has taken significant steps
towards regulating the crypto-asset industry by publishing its first final
report and launching a third consultation package under the Markets in
Crypto-Assets Regulation (MiCA).
In its
first final report, ESMA has outlined proposals on the information required for the
authorization of crypto-asset service providers (CASPs), the notification
process for financial entities intending to provide crypto-asset services, the
assessment of the intended acquisition of qualifying holdings in CASPs, and how
CASPs should address complaints.
The report
aims to promote fair competition between CASPs and create a safer environment
for investors across the European Union.
ESMA’s
Securities and Markets Stakeholder Group has advocated for a “level
playing field” where financial institutions providing crypto-asset
services are subject to the same oversight and regulation as intermediaries
offering similar financial services.
The group
has endorsed a “two-track approach” involving notification
requirements for regulated financial entities that largely align with the
authorization requirements for other entities.
“By
striking a balance between investor protection and fostering innovation,
regulators are rightly aiming to promote trust in the crypto ecosystem and
ensure its sustainable growth in the long term,” Kok Kee Chong, the CEO of
AsiaNext, commented on the final report.
Third Consultation Package
Seeks Input on MiCA
ESMA’s
third consultation package seeks input from stakeholders on four sets of
proposed rules and guidelines.
These cover detecting and reporting suspected market abuse in crypto-assets,
policies and procedures for crypto-asset transfer services, suitability
requirements for certain crypto-asset services, and ICT operational resilience
for entities under MiCA. Stakeholders have until June 25, 2024, to provide feedback.
“With
crypto markets known for their high volatility, a sound risk framework helps an
exchange minimise the impact of market uncertainties for institutional traders,
Aligning with wider financial industry best practices, it is key for exchanges
to engage in proactive risk management,” Kok Kee Chong added.
The
European Banking Authority (EBA) has also been consulting on the
measures under the MiCA regulation since its completion in 2023. Earlier in the
month, EBA and ESMA released a draft of regulations for issuers of stablecoins.
As the
crypto ecosystem has experienced concerning developments, such as the collapse
of crypto-asset service providers, ESMA has incorporated these lessons into the
regulatory framework.
The
European Securities and Markets Authority (ESMA) has taken significant steps
towards regulating the crypto-asset industry by publishing its first final
report and launching a third consultation package under the Markets in
Crypto-Assets Regulation (MiCA).
In its
first final report, ESMA has outlined proposals on the information required for the
authorization of crypto-asset service providers (CASPs), the notification
process for financial entities intending to provide crypto-asset services, the
assessment of the intended acquisition of qualifying holdings in CASPs, and how
CASPs should address complaints.
The report
aims to promote fair competition between CASPs and create a safer environment
for investors across the European Union.
ESMA’s
Securities and Markets Stakeholder Group has advocated for a “level
playing field” where financial institutions providing crypto-asset
services are subject to the same oversight and regulation as intermediaries
offering similar financial services.
The group
has endorsed a “two-track approach” involving notification
requirements for regulated financial entities that largely align with the
authorization requirements for other entities.
“By
striking a balance between investor protection and fostering innovation,
regulators are rightly aiming to promote trust in the crypto ecosystem and
ensure its sustainable growth in the long term,” Kok Kee Chong, the CEO of
AsiaNext, commented on the final report.
Third Consultation Package
Seeks Input on MiCA
ESMA’s
third consultation package seeks input from stakeholders on four sets of
proposed rules and guidelines.
These cover detecting and reporting suspected market abuse in crypto-assets,
policies and procedures for crypto-asset transfer services, suitability
requirements for certain crypto-asset services, and ICT operational resilience
for entities under MiCA. Stakeholders have until June 25, 2024, to provide feedback.
“With
crypto markets known for their high volatility, a sound risk framework helps an
exchange minimise the impact of market uncertainties for institutional traders,
Aligning with wider financial industry best practices, it is key for exchanges
to engage in proactive risk management,” Kok Kee Chong added.
The
European Banking Authority (EBA) has also been consulting on the
measures under the MiCA regulation since its completion in 2023. Earlier in the
month, EBA and ESMA released a draft of regulations for issuers of stablecoins.
As the
crypto ecosystem has experienced concerning developments, such as the collapse
of crypto-asset service providers, ESMA has incorporated these lessons into the
regulatory framework.
