ESMA issues guidelines on market abuse supervision under MiCA

The European Securities and Markets Authority (ESMA) has announced new guidelines to enhance supervisory practices aimed at preventing and detecting market abuse under the Market in Crypto-Assets Regulation (MiCA).

According to ESMA, these guidelines are based on its experience with the Market Abuse Regulation (MAR) and are directed towards National Competent Authorities (NCAs). They offer general principles for effective supervision and specific practices for identifying market abuse in crypto assets. The guidelines address the cross-border nature of crypto trading and the significant use of social media. They advocate for a risk-based and proportionate supervisory approach, intending to foster a common supervisory culture for crypto assets through collaboration with industry stakeholders and communication between NCAs.

The guidelines will take effect three months after their publication in all official EU languages. ESMA encourages NCAs to begin implementing these principles ahead of this timeline. Once published, competent authorities must inform ESMA within two months whether they comply, intend to comply, or do not comply with the guidelines.

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The European Union outlines that 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 various types of crypto-assets such as e-money and asset-referenced tokens. The regulation will be effective from December 30, 2024, including provisions on governance, disclosure, and preventing market abuse, overseen by EU authorities like the European Banking Authority (EBA) and ESMA.

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