ESMA Seeks MiCA Changes to Tighten Crypto Safeguards
European regulators are pushing for changes to the Markets in Crypto-Assets (MiCA) regulation to strengthen safeguards and address emerging digital asset services. The European Securities and Markets Authority (ESMA) has proposed revisions to the framework, aiming to simplify certain aspects while introducing stricter standards for marketing, stablecoins, staking, lending, and borrowing.
The proposals include increased transparency on costs, clearer disclosure rules for investors, and enhanced supervisory powers to combat unauthorized services and online fraud. ESMA also wants to improve the detection, blocking, and deactivation of fraudulent websites, as well as freeze crypto-assets in suspected cases of market abuse or terrorist financing.
The regulator's recommendations are intended to address concerns around DeFi protocols, stablecoins, and token classification. ESMA proposes a new regulated service category for firms providing access to DeFi protocols and wants clearer criteria for determining when an activity can be treated as genuinely decentralized.