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Malta’s cryptocurrency licensing process has come under scrutiny from the European Securities and Markets Authority (ESMA), Europe’s primary supervisory body overseeing the Markets in Crypto-Assets Regulation (MiCA). The ESMA on Thursday released a review of the authorization process of crypto asset service providers (CASPs) by Malta’s Financial Services Authority (MFSA), highlighting several shortfalls and proposing a set of recommendations. Despite saying the MFSA met certain expectations in supervisory setup and staffing, the EU watchdog said the Maltese authorities only “partially met expectations” in the authorization process for an unidentified CASP. Following the review, the ESMA’s ad hoc Peer Review Committee (PRC) recommended that MFSA “assess material issues that were pending at the date of the authorization or that have not been adequately considered at the authorization stage.” Malta review launched in April The report comes over a year after the MiCA framework came into force on June 29, 2024, becoming a major milestone in the EU’s approach to regulating digital assets. Since MiCA is aimed at providing a unified and consistent legal framework for crypto in the EU, the regulator highlighted that MiCA’s authorization approach applies to all National Competent Authorities (NCAs). In December 2024, the European Banking Authority’s Board of Supervisors (BoS), the agency’s main decision-making body, agreed on the adoption of a coordinated approach for CASPs authorizations. “Following a series of events, the BoS of ESMA decided, in April 2025, to launch a peer review on the authorization and early supervision of a CASP by the Malta Financial Services Authority,” the report noted, adding: “Although the peer review targeted one NCA, still, it aims to foster supervisory convergence and improve the supervisory practices of all NCAs, at a time when consistency across NCAs in authorization and setting supervisory expectations is key.” MFSA’s authorization fell short of expectations The…

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Filed under: News - @ July 11, 2025 2:27 am