The last opinion of the European Securities and Markets Authority (ESMA) on the requirements of conflicts of interest introduces a paradigm change for crypto-active service providers (CASPS). The improved framework of the regulation organization, unveiled in January 2025, suggests not only a potential separation of legal entities for contradictory services, but also implements strict monitoring of personal transactions and widens the definition of remuneration.
Last week, ESMA published a new opinion document, revealing significant changes to its regulatory technical standards (RTS) on interest conflicts for CASP under Mica. These changes represent a crucial step towards stronger protection of investors and the integrity of the market.
“ESMA suggests a limited number of modifications to the changes proposed by the European Commission, as explained later below,” commented the regulatory body in the last document. “ESMA recognizes that an appropriate balance should be found between, on the one hand, the protection of investors and the objectives linked to financial stability, and on the other hand, the promotion of safe and lasting innovation.”
A notable addition appears in Recital 4, which introduces a stricter approach to manage conflicts of acute interests. When standard policies and procedures prove to be insufficient, CASP may need to separate the conflicting services from crypto-active in distinct legal entities with independent management. This requirement targets in particular situations where conflicts cannot be adequately managed within a single entity or a single group structure.
In addition, the new recital 11 introduces complete requirements to monitor the personal transactions of connected people. The framework now explicitly:
- Requires an in -depth examination of transactions by connected persons
- Mandates Documents and Approval Process
- Prohibited transactions that would violate Mica regulations
“Recital 11 Mandating the monitoring of personal transactions of connected persons (with the addition of article 6 on this very specific subject (policies and procedures on conflicts of interest in the context of personal transactions) and that policies and procedures should include the prohibition of these transactions which harm Mica in particular the title VI (prevention and ban on market abuses), “commented Delphine Forma, leader in politics at Solidus Labs.
Cryptographic companies face improved monitoring
By moving more, the enlarged scope of article 5 presents a complete definition of the remuneration which covers all forms of payment, including the financial and non -financial advantages, whether provided directly or indirectly by the CASP in relation to Crypto-active services. This in -depth approach aims to fill the potential gaps that could be exploited by alternative compensation structures.
The modifications, according to ESMA, should create a more robust frame for the casps for:
- Identify and manage conflicts of interest more effectively
- Implement stronger internal controls
- Maintain a clearer separation between potentially contradictory activities
As part of the new executive, the Caps must also implement complete policies which integrate three key elements. First, they must establish detailed procedures to monitor and identify personal transactions. Second, they must maintain transparent remuneration disclosure frameworks which capture all forms of compensation.
🪙 #Esma And @Eba_news analyzed recent developments in cryptocurrencies, decentralized finance (DEFI), #crypto Location, borrowing and development → https://t.co/k2wssoehwa.
This publication contributes to @Eu_commission Report under article 142 of #Mica. pic.twitter.com/led9aemxdz
– ESMA – Regulator of the securities markets of the EU 🇪🇺 (@ESMACOMMS) January 17, 2025
Finally, they are required to develop organizational structures specially designed to prevent and manage potential conflicts of interest, with a clear separation of duties and responsibilities if necessary.
The changes offered are one thing, but reality is another. During an interview Financial magnate At FMLS: 24, Forma frankly admitted that “the cryptographic industry is not ready for mica”.
“I don’t think regulators are even ready,” she added. “Some countries have not even implemented an application law. In addition, Belgium has not even decided yet who will be the regulator in charge of mica in the country. »»
The last opinion of the European Securities and Markets Authority (ESMA) on the requirements of conflicts of interest introduces a paradigm change for crypto-active service providers (CASPS). The improved framework of the regulation organization, unveiled in January 2025, suggests not only a potential separation of legal entities for contradictory services, but also implements strict monitoring of personal transactions and widens the definition of remuneration.
Last week, ESMA published a new opinion document, revealing significant changes to its regulatory technical standards (RTS) on interest conflicts for CASP under Mica. These changes represent a crucial step towards stronger protection of investors and the integrity of the market.
“ESMA suggests a limited number of modifications to the changes proposed by the European Commission, as explained later below,” commented the regulatory body in the last document. “ESMA recognizes that an appropriate balance should be found between, on the one hand, the protection of investors and the objectives linked to financial stability, and on the other hand, the promotion of safe and lasting innovation.”
A notable addition appears in Recital 4, which introduces a stricter approach to manage conflicts of acute interests. When standard policies and procedures prove to be insufficient, CASP may need to separate the conflicting services from crypto-active in distinct legal entities with independent management. This requirement targets in particular situations where conflicts cannot be adequately managed within a single entity or a single group structure.
In addition, the new recital 11 introduces complete requirements to monitor the personal transactions of connected people. The framework now explicitly:
- Requires an in -depth examination of transactions by connected persons
- Mandates Documents and Approval Process
- Prohibited transactions that would violate Mica regulations
“Recital 11 Mandating the monitoring of personal transactions of connected persons (with the addition of article 6 on this very specific subject (policies and procedures on conflicts of interest in the context of personal transactions) and that policies and procedures should include the prohibition of these transactions which harm Mica in particular the title VI (prevention and ban on market abuses), “commented Delphine Forma, leader in politics at Solidus Labs.
Cryptographic companies face improved monitoring
By moving more, the enlarged scope of article 5 presents a complete definition of the remuneration which covers all forms of payment, including the financial and non -financial advantages, whether provided directly or indirectly by the CASP in relation to Crypto-active services. This in -depth approach aims to fill the potential gaps that could be exploited by alternative compensation structures.
The modifications, according to ESMA, should create a more robust frame for the casps for:
- Identify and manage conflicts of interest more effectively
- Implement stronger internal controls
- Maintain a clearer separation between potentially contradictory activities
As part of the new executive, the Caps must also implement complete policies which integrate three key elements. First, they must establish detailed procedures to monitor and identify personal transactions. Second, they must maintain transparent remuneration disclosure frameworks which capture all forms of compensation.
🪙 #Esma And @Eba_news analyzed recent developments in cryptocurrencies, decentralized finance (DEFI), #crypto Location, borrowing and development → https://t.co/k2wssoehwa.
This publication contributes to @Eu_commission Report under article 142 of #Mica. pic.twitter.com/led9aemxdz
– ESMA – Regulator of the securities markets of the EU 🇪🇺 (@ESMACOMMS) January 17, 2025
Finally, they are required to develop organizational structures specially designed to prevent and manage potential conflicts of interest, with a clear separation of duties and responsibilities if necessary.
The changes offered are one thing, but reality is another. During an interview Financial magnate At FMLS: 24, Forma frankly admitted that “the cryptographic industry is not ready for mica”.
“I don’t think regulators are even ready,” she added. “Some countries have not even implemented an application law. In addition, Belgium has not even decided yet who will be the regulator in charge of mica in the country. »»
