ESMA Proposes Tougher Crypto Regulations for EU Market

The European Securities and Markets Authority (ESMA) has proposed changes to the EU's crypto framework, focusing on decentralized finance, staking, and online fraud. The recommendations, submitted to the European Commission on September 30, aim to strengthen regulations for firms operating in the bloc.

Key proposals include stricter marketing rules, with tighter requirements for promotions by influencers and third parties. ESMA also seeks broader disclosures on costs, risks, rewards, collateral arrangements, and potential losses linked to staking, lending, and borrowing.

The regulator has called for stronger powers to detect and block fraudulent websites, as well as measures against unauthorized firms outside the EU that solicit investors. ESMA recommends explicit rules preventing regulated crypto firms from offering services connected to stablecoins that don't comply with MiCA.