ESMA Reviews Malta’s CASP Licensing, Flags Gaps in Crypto Oversight ⋅ Crypto World Echo
The European securities and Markets Authority conducted a peer review toevaluate Malta’s oversight of crypto asset service providers amid changing EUregulations. The review examined Malta’s authorisation process, governanceframeworks, anti-money laundering measures, and supervision afterauthorisation.
While Malta’s financial authority demonstrated sufficientresources and expertise, the report raised concerns about at least one casewhere a provider was authorised despite unresolved issues. These included ongoingenforcement actions, weak governance, and insufficient assessment of businessrisks, IT systems, and anti-money laundering controls.
Importance of Authorisation and Cross-Border Supervision
The report highlights that authorisation is a key tool formanaging risk and ensuring compliance. Since many CASPs operate cross-border,strong and consistent supervision is necessary. National regulators must relyon 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 identifiedhttps://t.co/dBy1J12NnQpic.twitter.com/O4OuYz78WE
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) July 10, 2025
Supervisory Gaps and Recommendations
Post-authorisation actions by the MFSA were generallyappropriate, though some issues should have been addressed earlier. ESMArecommended that the MFSA revisit unresolved risks and strengthen itsevaluations of growth plans, IT resilience, and group governance.
For all EU regulators, ESMA called for better informationsharing and attention to risks such as unregulated DeFi activity, custodyoperations, and user-facing interfaces. Clear risk warnings and cross-bordercooperation were also encouraged.
You may find it interesting at FinanceMagnates.com: ForexBrokers 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 ashiring crypto-specialised staff and engaging with the industry. The MFSAwelcomed the findings and committed to making improvements, citing its priorexperience 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. Theselicenses allow them to operate under Malta’s regulatory framework for virtualfinancial assets. The MFSA is responsible for ensuring that these companiescomply with relevant laws and regulations.
This article was written by Tareq Sikder at www.financemagnates.com.
