ESMA Demands Six Key Reforms to Strengthen EU Crypto Regulation

ESMA, the European securities watchdog, has submitted its response to the review of the MiCA regulation. The submission includes six key demands aimed at simplifying the framework, improving investor protection, and capturing new business models such as decentralized finance applications.

The first demand is for stricter requirements on advertising by crypto influencers. ESMA proposes that marketers clearly label paid posts, including those from non-authorized providers, to protect investors. The authority also calls for transparency on costs associated with these promotions.

Another key point is the need for disclosure duties related to staking, lending, and borrowing services. ESMA suggests that providers must disclose costs, risks, returns, collateralization, and possible losses before an investment decision is made.