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

2025-07-11 05:17:46

Main Idea

The European Securities and Markets Authority (ESMA) is reviewing Malta's cryptocurrency licensing framework under MiCA, highlighting gaps in Malta's Financial Services Authority's (MFSA) authorization processes and urging EU-wide regulatory alignment.

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.

Description

The European Securities and Markets Authority (ESMA) has placed Malta’s cryptocurrency licensing framework under review, raising concerns about how the island nation’s financial watchdog authorizes crypto asset service providers (CASPs). The evaluation, published Thursday, centers on the conduct of Malta’s Financial Services Authority (MFSA) and its processes under the Markets in Crypto-Assets (MiCA) regulation, which officially took effect across the EU in June 2024. Scrutiny Over Authorization...

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