Under a regulatory package released last December, the European Commission proposed that all MiCA regulated crypto asset service providers (CASPs) be supervised directly by ESMA, the EU securities regulator, rather than national authorities. EU finance ministers have watered down that proposal and instead want ESMA to supervise only “significant” CASPs.
However, the change is not quite as big as it appears. Under MiCA today, a significant CASP is one with at least 15 million EU users. That stays, but the finance ministers have added a set of alternative criteria, which effectively lowers the bar. For example, a CASP with just over 1 million users could qualify as significant, provided it meets at least two other tests such as the value of assets in custody and trading volume.
The change is part of the market integration and supervision package (MISP), on which the Council of the EU agreed the main elements of its negotiating position on Friday. MISP is separate from the Commission’s review of MiCA itself, informally known as MiCA 2, on which a consultation closed in August. Commissioner Maria Luís Albuquerque told ministers that under the compromise “only some providers will be supervised by ESMA” and that the Commission “deeply regrets the proposed compromise.” Her criticism covered several parts of the package, of which crypto was one.
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Image Copyright: European Council
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