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ESMA has submitted recommendations to the European Commission’s review of the EU’s Markets in Crypto-Assets Regulation, MiCA. The proposals cover marketing, costs, staking and lending disclosures, supervisory powers, DeFi and token classification, as well as ways to simplify some existing requirements.
The European Securities and Markets Authority (ESMA) has urged the European Commission to revise the EU’s Markets in Crypto-Assets Regulation (MiCA), proposing new investor safeguards, stronger supervisory powers and clearer rules for services including decentralised finance, staking and crypto lending. The recommendations are ESMA’s response to a Commission consultation; they are proposals, not adopted changes to the regulation.
For investors, ESMA recommends stricter rules for crypto-asset marketing, particularly promotions involving influencers and other third parties, along with greater transparency about costs. It also calls for proportionate requirements for staking, lending and borrowing, including disclosures about risks, rewards, collateral and possible losses before customers make decisions.
On supervision, ESMA says authorities need stronger tools to address unauthorised services, online fraud and stablecoins that do not comply with MiCA. Its recommendations include improving the EU’s capacity to detect and disable fraudulent websites and to freeze crypto-assets in cases of suspected market abuse or terrorist financing. It also seeks stronger powers concerning third-country firms soliciting EU customers without MiCA authorisation, and explicit rules to prevent regulated firms from offering services linked to non-compliant stablecoins.
For evolving business models, ESMA proposes criteria for deciding when activities are genuinely decentralised and a new regulated crypto-asset service for firms that give users access to DeFi protocols. It also wants common rules for classifying crypto-assets, including hybrid tokens, and authority for ESMA to issue binding opinions on token classification. Separately, it recommends simplifying white-paper notification procedures, reducing some duplicative authorisation requirements and improving consistency in prudential rules.
Stronger Safeguards for Crypto Users
The recommendations would address areas where ESMA says investors may not receive enough information or where supervisory powers may not match the risks. Clearer disclosure of costs, rewards, collateral and potential losses could help customers understand what they are exposed to in staking or lending arrangements. Tighter controls on promotions could also make responsibilities clearer when crypto-assets are marketed through influencers or third parties.
More consistent supervision and token classification could affect how crypto firms operate across the EU. ESMA’s proposed treatment of DeFi access services and hybrid tokens may bring some currently uncertain business models within clearer regulatory categories. The practical effects, however, would depend on the Commission’s response and any subsequent legislative changes.
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MiCA Review and Emerging Services
MiCA is the EU framework for crypto-assets and related services. The European Commission opened a public consultation on reviewing the regulation, and ESMA’s submission sets out the regulator’s recommendations for that review. The source material does not state when the response was submitted or provide a timetable for the Commission’s next steps.
ESMA’s proposals combine changes to existing rules with ideas for services and products that it says need clearer treatment. Alongside recommendations on investor protection and supervision, it points beyond the immediate MiCA review to a framework for tokenised securities and on-chain settlement. ESMA says that could support an integrated European tokenised capital market and future cross-border activity; this is a longer-term direction, not a measure described as already in force.
“ESMA’s recommendations aim to simplify the framework while improving investor protection and addressing innovative business models.”
— European Securities and Markets Authority
Proposals Await Commission Decisions
The source confirms that ESMA responded to the Commission’s consultation and outlines its recommendations, but it does not say which proposals the Commission will accept, whether it will propose legislation, or when any changes might take effect. MiCA has not been changed by this submission alone.
Several proposals also require further definition, including the criteria for genuine decentralisation, the scope of a new regulated service for access to DeFi protocols, and the procedures for issuing binding token-classification opinions. The source does not specify how those mechanisms would work in practice or how the proposed powers would be exercised.
Commission Review Sets the Next Step
The immediate next step is for the European Commission to consider consultation responses as part of its MiCA review. The source does not provide a decision date or confirm a legislative timetable. Any binding changes would depend on the Commission’s subsequent process and the adoption of relevant rules.
For now, ESMA’s recommendations indicate the areas it wants the review to address: investor disclosures and marketing, supervision of unauthorised activity, treatment of DeFi and stablecoins, and simpler compliance processes. Its separate call for a tokenised-securities and on-chain-settlement framework points to a broader policy discussion beyond the immediate review.
Key Questions
Has MiCA changed because of ESMA’s recommendations?
No. ESMA has submitted recommendations to the European Commission; the source does not report that the Commission has adopted them or that MiCA has been amended.
What investor protections does ESMA propose?
ESMA calls for stricter rules on crypto marketing, including influencer promotions, clearer cost information and disclosures for staking, lending and borrowing. The proposed disclosures would cover risks, rewards, collateral and possible losses.
What does ESMA propose for DeFi?
ESMA recommends clearer criteria for identifying genuinely decentralised activity and a new regulated service category for firms that give users access to DeFi protocols. These are proposals for the Commission’s review, not current changes to MiCA.
What happens after ESMA’s response?
The European Commission must consider responses to its MiCA consultation. The source provides no confirmed timetable or outcome for that review.
Source: primary
