ESMA Identifies Opportunities To Strengthen MiCA Authorisations
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, published today the results of a peer review looking at the authorisation of Crypto Asset Service Providers (CASPs) in Malta under the Market in Crypto Assets Regulation (MICA).
The peer review analyses the approaches adopted by the Malta Financial Services Authority (MFSA) in the authorisation and early supervision of a CASP and provides recommendations to strengthen these processes. It identifies overall a good level of resources and supervisory engagement within the authority, with some areas for improvement related to the assessment of authorisations.
Key findings:
- Some material issues where not fully resolved when MFSA granted the CASP authorisation;
- Some risks areas were not adequately assessed during the authorisation process;
- The MFSA has demonstrated a good level of expertise and supervisory cooperation.
The peer review also recommends to all NCAs currently in the process of authorising CASPs to pay particular attention to certain areas of risk, including business growth, conflicts of interests, governance and intragroup arrangements, ICT architecture, Web3, decentralised products, and the promotion of unregulated services.
While focused on an individual case, the review aims to foster the sound authorisation of CASPs by all NCAs in the EU. Its conclusions should be on-boarded by all NCAs to ensure that the authorisations they grant are well assessed in this new and high-risk sector, where supervisory knowledge is still being built.
This exercise is also an opportunity to reinforce EU supervisors’ role as gatekeepers of the EU single market in the crypto space.
Next steps
The objective of peer reviews is to enhance convergence and harmonisation in the process across the EU, and the NCAs are expected to integrate the recommendations in their internal processes, as well as in their on-going and future authorisations. ESMA will continue promoting further discussion on the recommendations and cross border cooperation.