The post EU Watchdog Flags Malta’s Fast-Track Crypto Licensing Process appeared on BitcoinEthereumNews.com.

European financial regulators have raised concerns about Malta’s approach to licensing crypto companies under the new EU-wide cryptocurrency rules. The European Securities and Markets Authority (ESMA) published a review today that questions whether Malta approved a crypto firm too quickly, despite unresolved risk issues. The review marks the first major test of the Markets in Crypto-Assets Regulation (MiCA), which became fully effective across the EU in December 2024. MiCA entered into force in June 2023 and includes substantial ‘Level 2 and Level 3’ measures that must be developed before the entry into application of the new regime. In EU regulatory terminology, MiCA’s implementation follows a hierarchical “Level” system. Level 2 measures are the detailed technical standards developed through delegated and implementing acts that specify operational requirements, authorization procedures, and technical specifications for crypto-asset service providers and stablecoins. Level 3 measures consist of soft law guidance, best practices, and supervisory tools developed by European authorities to ensure consistent implementation across member states. This multi-tiered approach was necessary because MiCA’s broad framework required extensive technical detail to be workable in practice, explaining why the regulation entered into force in June 2023 but couldn’t be immediately applied until these supplementary measures were developed and finalized. What ESMA Found in Malta ESMA’s peer review examined how Malta’s Financial Services Authority (MFSA) handled the approval of an unnamed crypto asset service provider (CASP). The evaluation found that the MFSA granted a green light to the CASP while several “material issues” were yet to be resolved, including outstanding remediation from previous enforcement cases and pending supervisory matters. The review identified three key areas where Malta’s approach fell short: Governance Problems: Issues with conflicts of interest and internal company arrangements remained unaddressed when the license was granted. Anti-Money Laundering Concerns: ESMA found gaps in how the company…

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Filed under: News - @ July 11, 2025 3:23 pm