Europe’s securities watchdog ESMA has warned crypto companies not to falsely promote their MiCA-regulated status to avoid misleading investors.
The European Securities and Markets Authority issued a warning to crypto companies on Friday, urging them not to use their regulated status under the EU’s MiCA framework, as a promotional tool, as initially reported by Reuters.
For context, the MiCA regulation aims to protect investors by imposing strict rules on how client assets are safeguarded and how complaints are handled. Under MiCA, companies offering crypto services must obtain a CASP license from a national regulator to operate across the EU.
“Some CASPs may even use their regulated status under MiCA as a marketing argument and encourage confusion between regulated and unregulated products and services,” the regulator stated.
Put simply, ESMA is saying that some crypto companies might brag about being MiCA-regulated to attract customers, but at the same time, they offer other products that aren’t regulated. This can confuse people into thinking all their products are safe and protected when that’s not true.
ESMA’s warning follows the publication of a recent peer review in which it critisized Malta’s Financial Services Authority for its lax approach in granting crypto licenses. The review found that while Malta has the expertise and resources to supervise crypto firms, its authorization process only “partially” met expected standards, raising concerns about regulatory consistency across the EU.
SourceCryptoNews
