ESMA seeks first input on detailed rules for crypto markets

ESMA has taken a significant step in regulating the crypto markets by publishing its first consultation package under the MiCA. MiCA is a comprehensive framework aimed at overseeing and supervising cryptoasset-related activities within the EU. In this initial consultation, ESMA seeks feedback from stakeholders on proposed rules for CASPs to ensure that the rapidly evolving crypto market operates under robust regulatory standards.
The consultation covers five draft RTS and two ITS. The RTS focus on the notification by certain financial entities intending to provide crypto-asset services, while the ITS establish standard forms, templates, and procedures for the information required in the application for authorization as a crypto-asset service provider. The application must provide essential information, such as the legal name and entity identifier of the applicant, their governance arrangements, internal controls, and details about their program of operations for the next three years.
Additionally, ESMA seeks input on how CASPs should address conflicts of interest, handle complaints from customers, and ensure proper segregation of clients‘ crypto-assets and funds. The goal is to establish a transparent and accountable system that puts the interests of investors and clients at the forefront.
To better understand the EU crypto-asset markets and their future development, ESMA asks respondents about their current and planned activities. The consultation aims to gather valuable insights into factors like expected turnover, use of on-chain vs. off-chain trading, and the number of white papers planned for publication.
The consultation package is part of a three-phase process, with ESMA planning to publish additional consultation packages in October 2023 and Q1 2024. After considering the feedback received by 20 September 2023, ESMA aims to finalize the rules and submit them to the EC for endorsement by 30 June 2024.