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ESMA has recommended changes to the EU’s Markets in Crypto-Assets Regulation, including stronger investor disclosures, expanded supervisory powers and clearer rules for DeFi and token classification. The proposals are recommendations submitted to the European Commission’s consultation, not adopted changes to MiCA.
The European Securities and Markets Authority (ESMA) has urged the European Commission to revise the EU’s Markets in Crypto-Assets Regulation (MiCA), proposing stronger investor safeguards, expanded supervision and clearer rules for services including DeFi, staking, lending and borrowing. The recommendations are part of ESMA’s response to the Commission’s public consultation; they are proposals, not changes already in force.
ESMA says MiCA should provide investors with clearer information about costs, risks, rewards and potential losses. Its recommendations include stricter rules for marketing crypto-assets, particularly promotions involving influencers and other third parties, and proportionate disclosure requirements for staking, lending and borrowing. The disclosures would also cover collateral arrangements, according to the regulator.
On supervision, ESMA calls for stronger tools to address fraudulent websites, unauthorised services and non-compliant stablecoins. It proposes enhancing the EU’s ability to detect and deactivate fraudulent sites and to freeze crypto-assets in cases of suspected market abuse or terrorist financing. It also wants reinforced powers to address third-country firms soliciting EU investors without MiCA authorisation, and explicit rules preventing regulated crypto firms from offering services connected to stablecoins that do not meet MiCA requirements.
The regulator also proposes clearer criteria for identifying genuinely decentralised activity and a new regulated crypto-asset service for firms that give users access to DeFi protocols. To make oversight more consistent across the EU, ESMA recommends common classification rules, including for hybrid tokens, and the ability for ESMA to issue binding opinions on token classification.
Other proposals target administrative complexity: simplifying white-paper notification procedures, reducing duplicative authorisation requirements for some regulated firms and making prudential requirements more consistent. Looking beyond the immediate review, ESMA says a framework for tokenised securities and on-chain settlement could support an integrated European tokenised capital market and cross-border activity.
Stronger Rules for Crypto Services
The proposals address areas where MiCA’s current framework may not give investors or supervisors clear enough information or authority, according to ESMA. If adopted, more detailed disclosures could help customers compare crypto services and understand potential losses before committing funds. Rules covering promotions would also address the role of influencers and third parties in marketing crypto-assets.
For regulators, clearer authority over unauthorised firms and stablecoin-related services could support more consistent action across EU countries. ESMA says stronger coordination and powers would reduce opportunities for regulatory arbitrage, where firms take advantage of differences in national approaches. The proposed DeFi access category and token-classification opinions could also give firms and supervisors a more consistent way to determine which requirements apply as products evolve.
These effects are potential outcomes, not established results: the Commission must consider the recommendations as part of its review, and the source does not indicate which proposals it will take forward.
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MiCA Review and Emerging Models
MiCA is the EU framework governing crypto-assets and related services. ESMA, the EU authority responsible for financial markets supervision and investor protection, submitted its recommendations in response to the European Commission’s public consultation on reviewing the regulation. The consultation provides a route for gathering views; ESMA’s submission does not itself amend the law.
The recommendations span both existing concerns and business models that have developed around crypto markets. ESMA links the proposed disclosures to investor risks in marketing and yield-related services, while its calls on DeFi and hybrid tokens address questions about how to classify activities and products that may not fit neatly within current categories.
ESMA also frames simplification as part of the EU’s burden-reduction agenda. Separately, its call for a framework covering tokenised securities and on-chain settlement looks beyond the immediate MiCA review toward future cross-border capital-market infrastructure.
“The recommendations aim to simplify the framework while improving investor protection and addressing innovative business models.”
— ESMA
Proposals Await Commission Review
The source describes ESMA recommendations, but does not say which proposals the European Commission will accept, whether it plans to draft legislative changes, or when a revised MiCA framework might take effect. No implementation timetable is provided.
The proposals also leave practical details unresolved. The source does not specify how genuinely decentralised activity would be defined, what requirements a new DeFi-access service would face, or how the proposed binding token-classification opinions would work in practice. It gives no thresholds or detailed procedures for the proposed website interventions, asset freezes or rules on firms dealing with non-compliant stablecoins.
It is also unclear from the material whether the Commission’s review will cover the wider framework for tokenised securities and on-chain settlement in the same legislative process. ESMA presents that framework as a longer-term need, rather than detailing a specific measure in this consultation response.
Commission Considers MiCA Feedback
The next step is for the European Commission to consider consultation responses, including ESMA’s recommendations, as it reviews MiCA. The source does not provide a schedule for the review or identify a date for decisions on individual proposals.
Any changes that require legislation would need further action before they could become binding requirements. Until then, the recommendations should not be treated as new rules for crypto firms or investors. The Commission’s response and any subsequent legislative proposals will show which measures move forward and how the suggested safeguards, supervisory powers and emerging-service rules may be put into practice.
Key Questions
Has MiCA changed following ESMA’s recommendations?
No. ESMA submitted recommendations to the European Commission’s consultation. The source does not report that any changes have been adopted or taken effect.
What investor protections does ESMA propose?
ESMA calls for stricter rules on crypto-asset marketing, including influencer and third-party promotions, greater cost transparency, and disclosures for staking, lending and borrowing. The proposed information would cover risks, rewards, collateral and potential losses.
What does ESMA recommend for DeFi?
It recommends clearer criteria for deciding whether an activity is genuinely decentralised and a new regulated crypto-asset service for firms that provide access to DeFi protocols. The source does not specify the detailed criteria or requirements.
How could the proposals affect crypto firms?
If adopted, the proposals could add disclosure and marketing obligations, change how some services are authorised or supervised, and create clearer requirements for token classification and stablecoin-related services. The Commission has not yet confirmed which recommendations it will pursue.
Source: primary
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