Malta has pushed back against a proposal by France, Italy, and Austria to expand the powers of the European Securities and Markets Authority (ESMA) to oversee major crypto firms across the EU.
Key Takeaways:
- Malta opposes handing crypto oversight to ESMA, warning it would add unnecessary bureaucracy and reduce efficiency.
- France, Italy, and Austria support giving ESMA more power, citing inconsistent application of MiCA rules across EU states.
- The debate highlights growing tension over MiCA’s passporting model, which some fear could lead to regulatory loopholes.
The three countries on Monday called for ESMA to take a direct supervisory role, expressing concern that member states may be interpreting the EU’s new Markets in Crypto-Assets (MiCA) regulation inconsistently.
The move would shift more authority away from national regulators and toward the Paris-based ESMA.
Malta Supports Regulatory Coordination, Rejects Centralized EU Crypto Oversight
Malta’s Financial Services Authority (MFSA), however, said it supports greater coordination between national regulators but not centralized control.
“We believe that centralisation at this stage would only introduce an additional layer of bureaucracy, which could hinder efficiency during a period when the EU is actively striving to enhance its competitiveness,” a spokesperson told Reuters.
While France has been a vocal advocate for ESMA’s increased role, even warning it may challenge crypto licenses issued by other countries, Malta appears cautious about handing over control.
The MFSA itself has faced scrutiny in recent months over its licensing process under MiCA.
Financial regulators across Europe remain divided on the issue.
ESMA chair Verena Ross has indicated she would welcome expanded oversight powers, but any shift in supervisory authority would require consensus among member states, something that’s proving difficult to achieve.
As reported, France has raised alarms over the uneven application of crypto licensing rules across the EU, warning it may block firms licensed in other member states from operating domestically.
The head of France’s AMF, Marie-Anne Barbat-Layani, called for transferring oversight to the ESMA to ensure consistent supervision.
The concern centers on the MiCA regulation’s “passporting” model, which allows crypto firms approved in one EU country to operate in all 27.
French regulators fear this system may create regulatory loopholes, enabling firms to exploit weaker oversight in certain jurisdictions as they expand across Europe.
ESMA Flags Gaps in Malta’s Crypto Licensing
In July, ESMA raised concerns about Malta’s crypto licensing process, following a peer review of the Malta Financial Services Authority (MFSA).
While acknowledging that the MFSA has adequate staffing and sector expertise, the review found that Malta only “partially met expectations” in its authorization of a crypto asset service provider (CASP), with several material issues left unaddressed during the approval stage.
The review, initiated in April 2025 by ESMA’s Peer Review Committee, focused on the MFSA’s supervisory setup, authorization procedures, and oversight tools.
ESMA emphasized that consistency across EU member states is essential under the MiCA regulatory framework, which seeks to standardize how crypto firms are licensed and supervised throughout the bloc.
Although the peer review targeted Malta specifically, ESMA stressed that the findings are meant to guide all National Competent Authorities (NCAs) as they refine their CASP approval processes.
The regulator urged the MFSA to reassess unresolved concerns from past authorizations and strengthen its review process in line with EU-wide expectations.
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