ESMA asks Brussels for stronger powers in the MiCA review

The EU's markets regulator wants more power over crypto than the bloc's main crypto law gives it. On September 30 the European Securities and Markets Authority published its response to the European Commission's review of MiCA, the Markets in Crypto-Assets regulation.

ESMA's requests fall into two groups. The first tightens conduct rules: stricter standards for crypto marketing, including promotion by influencers; disclosure requirements for staking, lending and borrowing; and a bar on regulated firms offering services tied to stablecoins that do not comply with MiCA.

The second group is about enforcement, and it is the more significant. ESMA is asking for the ability to block fraudulent websites and to freeze crypto assets in cases of suspected market abuse or terrorist financing. MiCA does not give it those tools today. It also wants to issue binding opinions on how a token should be classified, which would give firms one answer across the EU instead of a different reading from each national regulator.

For companies operating in Europe, the direction is toward a more centralized and more assertive supervisor. What the Commission proposes once its consultation closes will show how much of the list survives. One open question is where it draws the line for activity decentralized enough to sit outside the rules.