The European Securities and Markets Authority (ESMA) has released its final guidance ahead of the full implementation of the Markets in Crypto-Assets (MiCA) regulations in the region, according to a December 17 statement.
This marks the culmination of 18 months of regulatory efforts, during which ESMA, in collaboration with the European Banking Authority (EBA), has developed more than 30 technical standards and guidelines.
Strengthening market surveillance
An important point of attention in ESMA’s guidelines is tackling market abuse in crypto markets. The publication provides a structured reporting format for suspected abuse and establishes protocols for cooperation between regulators across borders.
These measures are intended to equip authorities with tools to detect market manipulation and enforce sanctions effectively.
The document also addressed reverse requests, outlining the conditions under which crypto asset service providers (CASPs) can work with customers.
In addition, it sets guidelines for suitability assessments so that CASPs can provide advice tailored to investors’ needs. ESMA emphasized alignment with existing financial regulations to promote consistency between advisory services.
Meanwhile, investor protection remains central to the framework. The guidelines highlighted the policies that CASPs must implement to protect customer transfers and outlined the requirements for classifying crypto assets as financial instruments.
MiCA implementation phases
The European MiCA regulations will come into full force at the end of this month. The first phase, which came into effect six months ago, focused on stablecoins.
Since its rollout, stablecoin issuers like Tether have faced significant compliance challenges, resulting in their USDT stablecoin being delisted on some platforms.
The second phase will focus on broader regulation for the crypto industry, addressing crypto asset operations, market integrity and investor protection.
ESMA believes that its final guidelines will support the consistent and effective implementation of MiCA across the region. However, Verena Ross, Chair of ESMA, noted:
“It is critical to recognize that the new regime would not be sufficient to remove the inherent uncertainty and volatility in the crypto asset market, and investors must fully understand the risks before entering this space. ”