ESMA Proposes Guidelines for Crypto Service Providers Under MiCA

ESMA's Guidelines for Crypto Service Providers

The European Securities and Markets Authority (ESMA) has proposed a set of guidelines to assess the knowledge and competence of individuals providing crypto-related services. These guidelines align with the EU's Markets in Crypto-Assets Regulation (MiCA), published in June 2023, aiming to enhance investor protection and trust in the growing crypto market.

Key Requirements for Crypto Service Providers

The proposed standards require staff of crypto service providers to have a deep understanding of crypto asset characteristics, risks, market operations, pricing, and blockchain technology. Additionally, they must be well-versed in regulatory and tax implications. The guidelines emphasize clear communication of information, particularly for complex and volatile crypto assets.

Staff Qualifications and Ongoing Development

ESMA's proposal outlines minimum qualifications for individuals in the crypto sector, including relevant experience, ongoing professional development, and a degree in a related field. Service providers will be responsible for annual staff reviews, oversight of unqualified employees, maintaining qualification records, and regular knowledge assessments.

Public Consultation and Feedback

ESMA is seeking input on the consultation paper, which includes questions on staff competence for crypto investment advice. Feedback is invited until April 22, with final guidelines expected in the third quarter of 2024.

Industry Context and Compliance

The move coincides with major exchanges like OKX, Crypto.com, and Bybit pursuing or obtaining licenses under MiCA framework. Earlier, ESMA addressed concerns over non-MiCA compliant stablecoins, such as Tether's USDT, leading to delisting by some European exchanges.

This initiative underscores ESMA's commitment to fostering a regulated and trustworthy crypto market environment in Europe.