The European Securities and Markets Authority (ESMA) has launched a public consultation on guidelines to assess the knowledge and competence of professionals that provide crypto-asset services among the markets in Cryptosets Regulation (MICA).
The consultation, published on 17 February, is intended to standardize the qualifications and experience that are necessary for people who advise or inform customers about digital assets.
Minimal competence standards
The concept guidelines determine clear criteria for professional qualifications, work experience and continuous education for staff employed by crypto-asset service providers (CASPs).
According to the proposal, persons who give investment advice on crypto-assets must meet stricter competence requirements than those who offer basic information services.
ESMA outlined that advisers must have a diploma of tertiary education or equivalent, have to undergo at least 160 hours of professional training and have relevant experience for at least one year. Those who provide general information about crypto-assets would require a professional qualification of at least 80 hours and six months under supervision of experience.
All professionals must undergo an assessment exam and complete the current training – at least 10 hours a year for information providers and 20 hours for advisors – to ensure that their knowledge remains up to date.
The guidelines also emphasize the importance of understanding crypto-specific risks, including market volatility, cyber security threats, blockchain government and liquidity risks associated with large asset holders.
Moreover, ESMA proposes that companies perform annual internal assessments to assess compliance with these standards.
Regular implications
The consultation is because the provisions of Mica for crypto-asset services are in force in the EU, with full implementation expected in 2025. The regulation wants to establish a harmonized legal framework for digital assets, for transparency, investor protection and prudential supervision.
ESMA noted that the growth of the crypto industry justifies higher operating standards to ensure that investors remain protected.
According to the regulator:
“The rapid expansion of crypto markets has increased risks, especially for retail investors. Ensuring that service providers maintain a basic level of expertise is crucial for investor protection and market integrity. “
The guidelines fit closely with existing MiFID II rules for financial markets, but introduce crypto-specific considerations, as a result of the unique character of blockchain-based assets.
Market participants, including CASPs, investors, financial institutions and industrial associations, are invited to give feedback on the proposed standards.
ESMA accepts comments until April 22, 2025 and expects to publish the final guidelines in the third quarter of the year.