The European Securities and Markets Authority (ESMA) has
released a peer review assessing how Malta’s Financial Services Authority
(MFSA) oversees Crypto Asset Service Providers (CASPs) under the Markets in
Crypto-Assets Regulation (MiCA).
Assessment Scope and Key Findings
The peer review focused on Malta’s authorisation process,
including its governance, AML checks, and post-authorisation supervision. It
found that the MFSA has adequate resources and expertise but raised concerns
about at least one case where a CASP was approved despite unresolved issues.
These included enforcement actions, weak governance, and insufficient review of
business risks, ICT systems, and AML controls.
Importance of Authorisation and Cross-Border Supervision
The report highlights that authorisation is a key tool for
managing risk and ensuring compliance. Since many CASPs operate cross-border,
strong and consistent supervision is necessary. National regulators must rely
on each other’s oversight to support a unified capital market.
🔎 A peer review analysing @MFSAComm approach to authorising #CryptoAsset Service Providers under #MiCA:✅ Good supervisory engagement and resources💡 Areas for improvement related to the assessment of authorisations were identified pic.twitter.com/O4OuYz78WE
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) July 10, 2025
Supervisory Gaps and Recommendations
Post-authorisation actions by the MFSA were generally
appropriate, though some issues should have been addressed earlier. ESMA
recommended that the MFSA revisit unresolved risks and strengthen its
evaluations of growth plans, IT resilience, and group governance.
For all EU regulators, ESMA called for better information
sharing and attention to risks such as unregulated DeFi activity, custody
operations, and user-facing interfaces. Clear risk warnings and cross-border
cooperation were also encouraged.
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Brokers May Cut Costs as ESMA Seeks Input on Overlapping EU Financial Reporting.
Positive Practices and MFSA’s Response
The report noted some good practices by the MFSA, such as
hiring crypto-specialised staff and engaging with the industry. The MFSA
welcomed the findings and committed to making improvements, citing its prior
experience in crypto regulation.
Malta Licenses Major Crypto Exchanges
Several well-known cryptocurrency exchanges, including Crypto.com,
OKX, Gate.io, and Gemini,
hold licenses issued by the MFSA. These
licenses allow them to operate under Malta’s regulatory framework for virtual
financial assets. The MFSA is responsible for ensuring that these companies
comply with relevant laws and regulations.
This article was written by Tareq Sikder at www.financemagnates.com.
