EU regulator targets false claims about MiCA protections
ESMA warns crypto firms against overstating MiCA coverage
The European Securities and Markets Authority (ESMA) has issued a firm warning to crypto asset firms across the European Union, cautioning them against overstating the extent to which their offerings are regulated.
The announcement underscores an increasing regulatory focus under the Markets in Crypto-Assets (MiCA) framework, which came into full effect earlier this year, reports Cryptopolitan.
ESMA emphasized that while MiCA brings much-needed standardization, it does not cover all crypto products or activities. In particular, offerings involving direct investments in commodities such as gold or crypto lending services remain outside MiCA’s legal umbrella.
The regulator raised concerns that some Crypto-Asset Service Providers (CASPs) are promoting their regulatory status in a way that may mislead customers into thinking all their services are EU-sanctioned. ESMA stressed that such practices obscure the distinction between regulated and unregulated products, which poses significant risks for investors.
Investor Protection at the Forefront
The recent warning is part of a broader EU campaign to protect investors from opaque or misleading crypto services. ESMA pointed to recent crypto collapses—such as the FTX debacle in 2022—as a reminder of what can go wrong when transparency and regulation are lacking. A particular concern highlighted by ESMA is that many CASPs offer both MiCA-regulated and non-regulated products on a single platform, without adequate disclosures. This blurring of the lines makes it difficult for retail users to understand what protections apply to which assets.
To counteract these risks, ESMA has urged firms to refrain from using their regulatory status as a marketing tool, noting that “regulatory approval” for one service does not mean blanket approval across all offerings. Regulators also reiterated that simply being licensed under MiCA does not make a firm’s entire product suite safe or compliant.
Licensing, Oversight, and Internal Compliance Under Scrutiny
As part of the MiCA implementation, the EU has rolled out new requirements for CASPs to obtain proper licensing through national regulators. This license serves as a “passport,” enabling cross-border operation throughout the EU. However, ESMA has now turned its attention to the licensing process itself. A recent probe into Malta’s Financial Services Authority found the country’s vetting procedures to be only “partially satisfactory.” While Malta was an early adopter of crypto rules, its relatively fast-track approval process has raised concerns among EU regulators.
In parallel, ESMA released new staffing standards for CASPs, mandating that employees possess the technical expertise necessary to evaluate and manage digital asset services. The EU’s evolving regulatory framework clearly indicates a shift from passive oversight to proactive enforcement—a move designed to rein in risky practices while fostering long-term market integrity.
Recently we wrote that six months after the full implementation of the European Union’s landmark crypto regulation, MiCA, 53 crypto-related entities have received authorization to operate legally across the EU’s 30-country bloc.
