The European Securities and Markets Authority (ESMA) has published its final guidance ahead of the full implementation of the Markets in Crypto Assets (MiCA) regulation in the region, according to a December 17 statement.
This marks the culmination of 18 months of regulatory efforts, during which ESMA developed more than 30 standards and technical guidelines in collaboration with the European Banking Authority (EBA).
Strengthen market surveillance
One of the major axes of ESMA’s guidelines is the fight against market abuse in the cryptocurrency markets. The publication includes a structured reporting format for suspected abuse and establishes protocols for cooperation between regulators across borders.
These measures aim to provide authorities with the tools to identify market manipulation and effectively apply sanctions.
The document also addresses reverse solicitation, describing the conditions under which crypto-asset service providers (CASPs) can interact with customers.
In addition, it establishes guidelines for suitability assessment, ensuring that PSAPs provide advice tailored to the needs of investors. ESMA highlighted alignment with existing financial regulations to promote consistency across advisory services.
At the same time, investor protection remains at the heart of the framework. The guidance highlights the policies that PSAPs must implement to protect customer transfers and describes the requirements for classifying cryptoassets as financial instruments.
MiCA implementation phases
The European MiCA regulation will come into full force at the end of this month. The first phase, which came into force six months ago, targeted stablecoins.
Since its deployment, issuers of stablecoins like Tether have faced significant compliance issues, resulting in their USDT stablecoin being delisted on some platforms.
The second phase will focus on broader regulation of the crypto sector, addressing crypto-asset operations, market integrity and investor protection.
ESMA believes that its final guidance will support the consistent and effective implementation of MiCA in the region. However, Verena Ross, President of ESMA, noted:
“It is crucial to recognize that the new regime will not be sufficient to eliminate the uncertainty and volatility inherent in the crypto-asset market, and investors must fully understand the risks before engaging in this space.”
