Regulatory Context
The entry into the application of the Markets in Crypto-Assets Regulation (MiCA) marks a major step forward for the regulation of crypto assets in Europe. However, the Autorité des marchés financiers (AMF), the Financial Market Authority (FMA), and the Commissione Nazionale per le Società e la Borsa (CONSOB) note that its application remains fragmented and certain provisions do not adequately prevent risks that are specific to the sector, thereby threatening the competitiveness of European players and investor protection.
Four Strategic Priorities to Strengthen MiCA
What follows is a summary of the regulators' four main recommendations.
1. Centralised Supervision of Major Crypto-Asset Service Providers
The AMF, FMA, and CONSOB call for direct European Securities and Markets Authority (ESMA) supervision of significant crypto-asset service providers (CASPs). Currently, the regime proposed by MiCA is based only on a reporting obligation by national authorities to ESMA, limiting the effectiveness and scope of supervision.
The three authorities advocate for a transfer of power to ESMA, following the examples of the Single Supervisory Mechanism and the regime applicable to issuers of stablecoins of significant importance, which is supervised by the European Banking Authority.
Impact for businesses: This centralisation would avoid fragmentation as well as opportunistic choices between jurisdictions while reducing supervision costs.
2. Stricter Rules for Global Platforms
The AMF, FMA, and CONSOB propose strengthened supervision of platforms established outside the EU that nonetheless target European investors. They suggest that any intermediary executing orders on crypto assets on behalf of European clients should be obliged to do so on a platform that complies with MiCA or equivalent regulations.
According to the regulators, some major platforms established in third countries reach EU clients through brokers authorised in Europe as CASPs that simply route orders, without the exchange platform itself being located in the EU.
3. Enhanced Supervision Against Cyber Threats
The AMF, FMA, and CONSOB stress the importance for CASPs to perform an independent cybersecurity audit prior to the granting of the authorisation and renew the audit periodically. This audit would cover, among others, protection of assets, resilience to cyberattacks, and incident management.
The regulators propose that MiCA require all candidates for CASP status to undergo cybersecurity audits by independent and competent providers — before being granted authorisation — to assess the CASP candidate's compliance with state-of-the-art cybersecurity requirements, as well as its ability to prevent and react effectively to cyberattacks.
4. One-Stop Shop for Token Offerings
The AMF, FMA, and CONSOB propose to clarify the scrutiny process for token offerings and consider centralisation of the filing and management of token offerings (excluding stablecoins) with ESMA, instead of the current approach, in which national authorities merely act as relays.
Market Implications
Crypto-asset markets cross borders by nature and are dominated today by a few global players: 90% of crypto-asset trading is concentrated on the 10 largest platforms, with commercial activity carried out directly via the internet and mobile applications.
These proposals aim to:
- Guarantee effective supervision of crypto assets in Europe
- Strengthen the competitiveness of European players
- Ensure better protection for investors
- Avoid regulatory arbitrage between member states
Implications for Market Participants
Beyond the regulators' joint communication, our market
expertise suggests that the following consequences are likely for
crypto-asset service providers.
The proposals put forward by AMF, FMA and CONSOB would have
tangible consequences for crypto-asset service providers. While
centralised supervision and cybersecurity audits may enhance legal
certainty and investor trust, they would also increase compliance
costs. This could favour larger players with sufficient resources,
while smaller providers might face challenges in meeting the
heightened requirements. Over time, the European market could see
further consolidation, but also greater credibility at the
international level.
Future Outlook
Beyond the regulators' proposals, our analysis points to broader trends likely to shape the debate on investor protection and market integrity. Looking ahead, it is also important to situate these proposals within the broader European policy agenda, including the Capital Markets Union and the digital finance strategy.
While the regulators' joint communication did not specifically address this point, the following outlook reflects a possible direction for regulatory debate in light of the increasing hybridisation of markets.
The increasing hybridisation of crypto and traditional financial assets may, in the future, lead regulators to explore whether more consistent investor protection rules across financial services are needed. This could include, for example, considering whether all providers of crypto-asset services should be required to collect clients' information to assess their ability to understand the crypto-asset products they wish to trade.
These recommendations form part of a European harmonisation approach aimed at strengthening investor protection while preserving innovation and competitiveness in the European crypto-asset sector.
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