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EU Crypto Regulations Getting Closer: ESMA Publishes Final Report
TheEuropean Securities and Markets Authority (ESMA) has taken significant stepstowards regulating the crypto-asset industry by publishing its first finalreport and launching a third consultation package under the Markets inCrypto-Assets Regulation (MiCA).
ESMA Finalizes First Rulesfor Crypto-Asset Service Providers
In itsfirst final report, ESMA has outlined proposals on the information required for theauthorization of crypto-asset service providers (CASPs), the notificationprocess for financial entities intending to provide crypto-asset services, theassessment of the intended acquisition of qualifying holdings in CASPs, and howCASPs should address complaints.
The reportaims to promote fair competition between CASPs and create a safer environmentfor investors across the European Union.
ESMA'sSecurities and Markets Stakeholder Group has advocated for a "levelplaying field" where financial institutions providing crypto-assetservices are subject to the same oversight and regulation as intermediariesoffering similar financial services.
What is in the Report? Information required for: authorisation where financial entities notify intent to provide crypto-asset services assessment of intended acquisition of a qualifying holding in a CASP How CASPs should address complaintshttps://t.co/FWxk0W4v3d pic.twitter.com/iutLpGRUdX
ESMA - EU Securities Markets Regulator (@ESMAComms) March 25, 2024The grouphas endorsed a "two-track approach" involving notificationrequirements for regulated financial entities that largely align with theauthorization requirements for other entities.
Bystriking a balance between investor protection and fostering innovation,regulators are rightly aiming to promote trust in the crypto ecosystem andensure its sustainable growth in the long term, Kok Kee Chong, the CEO ofAsiaNext, commented on the final report.
Third Consultation PackageSeeks Input on MiCA
ESMA'sthird consultation package seeks input from stakeholders on four sets ofproposed rules and guidelines.
These cover detecting and reporting suspected market abuse in crypto-assets,policies and procedures for crypto-asset transfer services, suitabilityrequirements for certain crypto-asset services, and ICT operational resiliencefor entities under MiCA. Stakeholders have until June 25, 2024, to provide feedback.
What is in the #consultation? Detection & reporting market abuse in #CryptoAssets Policies & procedures transfer services Suitability requirements and format of the periodic statement for portfolio management #ICT operational resiliencehttps://t.co/4IBSL3GYvt pic.twitter.com/0xSQvJQbur
ESMA - EU Securities Markets Regulator (@ESMAComms) March 25, 2024Withcrypto markets known for their high volatility, a sound risk framework helps anexchange minimise the impact of market uncertainties for institutional traders,Aligning with wider financial industry best practices, it is key for exchangesto engage in proactive risk management, Kok Kee Chong added.
TheEuropean Banking Authority (EBA) has also been consulting on themeasures under the MiCA regulation since its completion in 2023. Earlier in themonth, EBA and ESMA released a draft of regulations for issuers of stablecoins.
#EBA final draft Regulatory Technical Standards (RTS) under #MiCAR These set out the requirements, templates and procedures for handling complaints received by issuers of asset reference tokens (ARTs) https://t.co/yT3pSGSowh pic.twitter.com/DvycTm2MqI
EU Banking Authority - EBA (@EBA_News) March 13, 2024As thecrypto ecosystem has experienced concerning developments, such as the collapseof crypto-asset service providers, ESMA has incorporated these lessons into theregulatory framework.
This article was written by Damian Chmiel at www.financemagnates.com.
