What Changed
- ESMA proposed stricter marketing rules, cost transparency, and disclosure obligations for crypto staking, lending, and borrowing.
- ESMA called for reinforced supervisory powers to block fraudulent websites, freeze assets, prohibit non-compliant stablecoin services, and act against unauthorized third-country firms.
- ESMA recommended establishing criteria for decentralized activities, creating a regulated service for DeFi access, and acquiring power to issue binding opinions on token classification.
Crypto-asset service providers, financial institutions, decentralised finance (DeFi) platforms, third-country firms soliciting investors within the European Union, and retail investors are directly impacted by proposals submitted by the European Securities and Markets Authority (ESMA). As the EU's financial markets regulator and supervisor, ESMA has published its response to the European Commission's public consultation regarding the review of the Markets in Crypto-Assets Regulation (MiCA).
ESMA's recommendations aim to simplify the regulatory framework while strengthening investor protection and addressing innovative financial activities such as DeFi, staking, lending, and borrowing. To address investor risks, ESMA proposes stricter marketing rules—particularly for promotions by influencers and third parties—greater cost transparency, and proportionate disclosure requirements for staking, lending, and borrowing arrangements before investment decisions are finalized.
To strengthen supervisory capacity and mitigate risks from unauthorised services, online fraud, and non-compliant stablecoins, ESMA recommends expanding enforcement tools. Proposed measures include enhancing the EU's ability to detect, block, and deactivate fraudulent websites, freeze assets in cases of suspected market abuse or terrorist financing, enforce rules against third-country firms soliciting EU investors without MiCA authorisation, and prohibit regulated crypto firms from offering services connected to non-compliant stablecoins.
To accommodate market developments, ESMA advocates for clear criteria to define genuinely decentralised activities and recommends introducing a new regulated crypto-asset service for firms enabling access to DeFi protocols. ESMA also proposes rules for classifying crypto-assets, including hybrid tokens, and seeks the authority to issue binding opinions on token classification to ensure consistent application across the EU. Additionally, ESMA suggests streamlining white-paper notifications, reducing duplicative authorisations, and harmonising prudential rules, while calling for a future framework covering tokenised securities and on-chain settlement.
Who May Be Affected
Crypto-asset service providers, DeFi protocol access providers, third-country firms soliciting EU investors, regulated financial institutions, and EU crypto investors.
Cross-Border Context
Third-country firms soliciting EU investors without MiCA authorisation face reinforced supervisory oversight, directly affecting international crypto entities offering services into the European Union.
What to check next
- Monitor legislative proposals from the European Commission following the review of the MiCA regulation.
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.
Prepared automatically with AI assistance from the official sources linked on this page. Translations and explanations do not replace the official text.