The European Securities and Markets Authority (ESMA) has placed the Malta cryptocurrency license framework during a examination, which raises concerns about the way in which the financial guard dog of the island nation authorizes asset service providers (CASP).
The evaluation, published Thursday, focuses on the conduct of the Malta Financial Services Authority (MFSA) and its processes under the markets on the markets in the Crypto-Astets (Mica) assets, which officially took effect through the EU in June 2024.
Meticulous examination on authorization standards
The ESMA peers (PRC) peer review committee carried out a targeted assessment of the MFSA authorization of an unnamed Casp, identifying the domains where the regulator has not succeeded. Although the MFSA has proven to have adequate personnel and technical infrastructures, the exam noted that it “partially met expectations” during the approval process.
The European guard dog stressed that the concerns extended beyond Malta, urging all the national national authorities (ANC) of the EU to align their monitoring mechanisms to ensure coherence between the jurisdictions of the unified regulatory regime of the Mica.
Peer examination in Malta’s supervision practices comes from a decision of the ESMA Supervisor Council (BOS) in April 2025. He followed the measures taken in December 2024 when the BOS and the European banking authority adopted a harmonized approach to supervise the CASP authorities under Mica.
According to the ESMA report, although the examination targets a country, its intention is to promote regulatory convergence throughout the EU while the implementation of the mica increases.
The PRC has analyzed three key dimensions of the Malta cryptography regulation: the supervision structure and the staff, the authorization processes and the post-library monitoring measures. The MFSA was congratulated by having a sufficient level of expertise and resources to support CASP supervision.
However, the ESMA report underlined the gaps in the way the agency managed the material problems during the authorization phase. He recommended that the MFSA will improve its ability to assess unresolved or not examined problems that could emerge after approval.
Calls for convergence between EU supervisors
The ESMA report highlights the importance of regulatory consistency, especially since new cryptographic companies require the granting of licenses under Mica. In particular, the PRC has warned that national regulators must adapt quickly to growing application volumes and the risk profiles evolution of the casps.
“Due to the novelty and nature of these types of entities as well as the risks inherent in their business model, the PRC recommends to all the ANC … To pay particular attention to certain aspects of the authorization,” said the committee.
While Malta has historically positioned itself as a friendly jurisdiction of the crypto within the EU, the ESMA review illustrates the changing expectations that all the Member States are confronted with all the Member States.
With Mica designed to eliminate regulatory arbitration and create a level playground, NCA will have to align not only their license processes, but also their supervision capacity and their application strategies.
In the future, regulatory coordination and transparency will likely become basic benchmarks to assess the effectiveness of national cryptography surveillance.
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