The European Union, under the Markets in Crypto Assets (MiCA) Regulation, has defined maximum extraction value (MEV) as a prohibited market manipulation tactic.
European Securities and Markets Authority (ESMA) published its third advisory document to clarify the MiCA guidelines, with the aim of removing ambiguities before the law is fully implemented. MEV, where miners or validators use their position to reorder transactions for profit, is highlighted as a prime example of market abuse.
Patrick Hansen, Circle’s head of strategy and policy in the EU, emphasized that the ESMA report clearly defines MEV, describing it as a method that allows miners/validators to profit by manipulating the order of a transaction.
To tackle such abuses, ESMA will require trading platforms to report all instances of MEV use. A draft Suspicious Activity Reporting Template has been published, with further refinements expected following stakeholder feedback by 25 June.
The EU’s move against MEV and similar abuses is part of a wider strategy to strengthen its position in the capital market. Patrick Hansen noted recent negative trends in the EU in key economic areas, warning that without decisive action the region risks falling behind other markets such as the United States.
By implementing MiCA, the EU aims to improve its market dynamics and attract more investment, positioning itself as a competitive player in the global financial ecosystem.
