said<\/a> that the European Commission is currently drafting the regulatory reform which would serve to make regulatory supervision more uniform among the capital market in Europe. The EU had previously proposed making ESMA the main supervisor of crypto firms when MiCA was first drawn up, however it has not been fully implemented.<\/p>\nThe plan to make ESMA the sole regulator for crypto in the EU has received backlash from smaller countries with budding crypto agendas, such as Luxembourg and Malta. Malta in particular has been actively granting licenses to crypto asset service providers. <\/p>\n
<\/p>\n
As of July 2025, Malta has granted at least five CASP licenses under the MiCA regulatory framework, including licenses for major crypto exchanges such as Crypto.com and OKX. These five licenses were among the first in Europe to be granted under the new MiCA framework, making Malta a significant early adopter of the EU\u2019s comprehensive crypto-asset framework.<\/p>\n
In fact, ESMA had criticized Malta\u2019s license approval process for crypto companies. In July, the EU financial authority had alleged that \u201csome risks areas were not adequately assessed during the authorization process\u201d for one unnamed company that received a license from Malta authorities.<\/p>\n
\u201cIt also means that people had to build up specific new resources and expertise 27 times in different national supervisors, which could have been done more efficiently once at a European level,\u201d said Ross to Financial Times.<\/p>\n
Why ESMA at the helm is controversial<\/h2>\n
Established in 2011, ESMA was formed in hopes of improving the harmonization of market rules across the EU. However, most of the region\u2019s financial market activities still fall under the supervision of each of its 27 national authorities.<\/p>\n
Ross said that the EU watchdog has \u201ctried for quite some time with the capital markets union and other initiatives to build a more effective capital market.\u201d Despite the efforts, it has yet to implement such measures to place all the EU markets under one umbrella because each area has very different market structures.<\/p>\n
Not everyone agrees that ESMA should have full control over the various EU markets, especially in terms of its emerging crypto markets. Some smaller EU nations, including Luxembourg, Malta, and Ireland, have pushed back against giving more authority to ESMA, arguing it could threaten their well-established financial sectors.<\/p>\n
Not to mention, for the growing crypto industry, placing ESMA at the helm of regulating crypto asset service providers could create a rigid, one-size-fits-all system that stifles innovation and concentrates too much power in a single authority.<\/p>\n
Head of Luxembourg\u2019s financial watchdog, Commission de Surveillance du Secteur Financier or CSSF, Claude Marx had warned<\/a> that placing all EU investment funds under ESMA\u2019s supervision would risk creating a \u201cmonster\u201d in what he deems to be an \u201cextremely complex\u201d organization.<\/p>\n\u201cIt is a fantasy that the European Commission wants to push a single supervisor. The European Commission has always stated they do not have an id\u00e9e fixe to have a European SEC,\u201d said Marx, referring to the U.S financial watchdog.<\/p>\n
<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
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