ESMA Puts Malta’s Crypto Oversight Under the Microscope—Is MiCA at Risk?

Key Points

1. ESMA's review focuses on Malta's MFSA and its compliance with the Markets in Crypto-Assets (MiCA) regulation, noting shortcomings in authorization processes.

2. The MFSA was found to have adequate staffing and technical infrastructure but only 'partially met expectations' in handling material issues during authorization.

3. ESMA recommends improvements in MFSA's processes and calls for convergence in oversight standards across all EU national competent authorities (NCAs).

4. The review underscores the need for EU member states to align licensing processes, supervisory capacity, and enforcement strategies under MiCA.

5. ESMA's evaluation highlights evolving risks in crypto asset service providers (CASPs) and urges NCAs to address these risks consistently.