ESMA Calls For Changes To Make MiCA Clearer, Safer And Ready For Emerging Services

TL;DR

Prime Big Deal Days · Oct 6–7Offer from Amazon

Get smart everyday buys delivered free — and shop member deals

• Fast, free delivery on millions of items
• Access to Prime Big Deal Days deals on October 6–7
• Prime Video, Amazon Music and more included

Start your free Prime trial →Free trial for eligible customers · Cancel anytime

As an affiliate, we earn on qualifying purchases.Hide

The European Securities and Markets Authority has submitted recommendations to the European Commission’s review of the EU’s Markets in Crypto-Assets Regulation. Its proposals cover stronger investor disclosures and supervision, clearer rules for DeFi and token classification, and streamlined procedures; they are recommendations, not adopted changes.

The European Securities and Markets Authority (ESMA) has urged the European Commission to revise the EU’s Markets in Crypto-Assets Regulation (MiCA), proposing clearer rules, stronger investor safeguards and supervisory tools for services including decentralised finance, staking, lending and borrowing. The recommendations were submitted in response to the Commission’s public consultation and are proposals, not changes already in force.

For consumer protection, ESMA recommends stricter requirements for crypto-asset marketing, particularly promotions involving influencers and other third parties, and greater transparency about costs. It also proposes proportionate requirements for staking, lending and borrowing, including disclosures that explain risks, rewards, collateral and potential losses before customers make decisions.

On enforcement, the regulator says supervisors need stronger tools to address unauthorised services, online fraud and stablecoins that do not meet MiCA requirements. Its suggested measures include improving the EU’s ability to detect and disable fraudulent websites and freeze crypto-assets in specified cases, strengthening action against unauthorised third-country firms soliciting EU investors, and explicitly preventing regulated crypto firms from providing services linked to non-compliant stablecoins.

ESMA also calls for criteria to determine whether activities are genuinely decentralised and proposes a new regulated crypto-asset service for firms that give users access to DeFi protocols. To reduce divergent treatment across member states, it wants clearer classification rules—including for hybrid tokens—and the authority to issue binding opinions on token classification. Other proposals would simplify white-paper notifications, reduce some duplicative authorisation requirements and improve consistency in prudential rules.

Stronger safeguards for crypto users

If taken forward, the recommendations could affect how crypto firms market products, explain fees and risks, and provide access to services such as staking or DeFi. More consistent disclosures could give customers clearer information about possible losses and how assets or collateral are handled, though the proposals themselves do not guarantee that investors will avoid losses.

For firms and supervisors, clearer classification and stronger enforcement powers could reduce uncertainty about which rules apply and make cross-border oversight more consistent. ESMA also looks beyond the immediate MiCA review, saying Europe needs a framework for tokenised securities and on-chain settlement to support an integrated market and cross-border activity. That longer-term issue is related to the broader development of digital finance, but the source does not set out a detailed framework or timetable.

MiCA review and proposed scope

MiCA is the EU regulatory framework for crypto-assets. The European Commission has opened a public consultation on reviewing it, and ESMA’s response sets out changes the EU markets regulator considers necessary to make the framework clearer, better able to protect investors and more adaptable to evolving services. The source describes ESMA as the EU’s financial markets regulator and supervisor; it does not say that the Commission has accepted or legislated for the proposals.

The recommendations span both targeted adjustments and broader policy questions. Some address existing processes, such as white-paper notifications and overlapping authorisation requirements. Others would bring greater clarity to activities that can be difficult to classify, including DeFi access services and hybrid tokens. ESMA also argues for future work on tokenised securities and on-chain settlement, which it frames as a step beyond the immediate MiCA review.

“The recommendations aim to simplify the framework while improving investor protection and addressing innovative business models.”

— European Securities and Markets Authority

Proposals still await Commission review

The source confirms that ESMA submitted recommendations to a public consultation; it does not establish which, if any, the European Commission will adopt. No final legal text, implementation timetable or effective date is provided. The proposals should not be read as current obligations for crypto firms.

Several measures would also need more detail before their practical effects could be assessed. The source does not specify how proposed powers to disable websites or freeze crypto-assets would be triggered, how the new DeFi-related service would be defined, or how binding token-classification opinions would operate. It also does not describe the proposed disclosure format or thresholds for staking, lending and borrowing.

Commission review sets the next step

The next step identified in the source is the European Commission’s review of MiCA, which includes the public consultation to which ESMA responded. The Commission’s position on the recommendations, and whether it will propose legal amendments, is not stated in the source. Any changes would depend on subsequent EU decision-making; no schedule is given.

For now, the proposals signal the subjects ESMA wants addressed: disclosures and marketing, supervisory powers, unauthorised firms and non-compliant stablecoins, DeFi access, token classification and simpler procedures. The regulator’s longer-term call for a framework covering tokenised securities and on-chain settlement may also inform future EU work, but the source does not identify a separate process or deadline.

Key Questions

Has MiCA changed as a result of ESMA’s recommendations?

No. ESMA submitted proposals to the European Commission’s consultation. The source does not say that the Commission has adopted them or that MiCA has been amended.

What investor safeguards does ESMA propose?

ESMA proposes stricter rules for crypto marketing, including influencer promotions, clearer cost information and proportionate disclosures for staking, lending and borrowing about risks, rewards, collateral and possible losses.

What does ESMA recommend for DeFi?

It calls for clearer criteria to identify genuinely decentralised activity and proposes a new regulated crypto-asset service for firms that provide users with access to DeFi protocols. The source does not give detailed definitions or implementation rules.

What remains unknown about the proposals?

The Commission’s response, the final content of any amendments and a timeline are not provided. Details of how some proposed powers and new service requirements would work also remain unspecified.

Source: primary