ESMA announces supervisory briefing on MiCA best practices

The European Securities and Markets Authority (ESMA) has announced the publication of a new supervisory briefing aimed at standardizing practices across EU member states in line with the Markets in Crypto-Assets (MiCA) regulation. The announcement was made in a press release on January 31.

According to ESMA, the supervisory briefing, developed with input from National Competent Authorities (NCAs), seeks to create consistency across EU member states and prevent regulatory arbitrage. It provides detailed guidance on expectations for Crypto Asset Service Providers (CASPs) and the NCAs handling their authorization requests. Key areas addressed include governance, the necessity for CASPs to operate autonomously with adequate in-country personnel, and effective limits on outsourcing. It also highlights the importance of CASPs’ executive management demonstrating technical knowledge of the crypto ecosystem.

The briefing aims to operationalize MiCA and Regulatory Technical Standards (RTS) obligations by offering concrete controls for NCAs, applicants, and the public. This is intended to help maintain a strong and consistent regulatory framework for the crypto sector. ESMA states that NCAs are expected to apply the principles outlined in the briefing during the authorization process and ensure ongoing compliance from CASPs after they are authorized.

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According to the European Union, MiCA establishes uniform rules for crypto-asset issuers and service providers not covered by existing EU laws. It aims to ensure transparency, consumer protection, and market stability, with specific obligations for different types of crypto-assets, including e-money and asset-referenced tokens. The regulation will be effective from December 30, 2024, including provisions on governance, disclosure, and preventing market abuse, with oversight by EU authorities like the European Banking Authority (EBA) and ESMA.

ESMA is focused on investor protection, orderly markets, and financial stability as part of its role as the EU's financial markets regulator. Established in 2011 following the de Larosière report, ESMA promotes consistent supervision across Member States, collaborates with banking and insurance authorities, and reports to EU institutions.