The European Securities and Markets Authority (ESMA) has placed Malta’s cryptocurrency licensing framework under review, raising concerns about how the island nation’s financial watchdog authorizes crypto asset service providers (CASPs).
The European watchdog emphasized that the concerns extended beyond Malta, urging all EU national competent authorities (NCAs) to align their oversight mechanisms to ensure consistency across jurisdictions under MiCA’s unified regulatory regime.
According to the ESMA report, although the review targeted one country, its intent is to foster regulatory convergence throughout the EU as MiCA implementation ramps up.
However, ESMA’s report pointed to gaps in how the agency handled material issues during the authorization stage. It recommended that MFSA improve its ability to assess unresolved or underexamined issues that could emerge after approval.
“Due to the novelty and nature of these types of entities as well as the inherent risks of their business model, the PRC recommends to all NCAs…to pay particular attention to certain aspects of the authorization,” the committee stated.
While Malta has historically positioned itself as a crypto-friendly jurisdiction within the EU, the ESMA’s review illustrates the shifting expectations facing all member states.
Moving forward, regulatory coordination and transparency will likely become core benchmarks for assessing the effectiveness of national crypto oversight.
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