Europe’s top securities regulator is sounding the alarm over how some crypto firms are marketing themselves to the public.
On Friday, the European Securities and Markets Authority (ESMA) issued a warning to crypto companies, telling them not to flaunt their regulated status under the EU’s new MiCA rules as a way to promote their services. The news was first reported by Reuters.
The Markets in Crypto-Assets (MiCA) regulation is designed to better protect investors in the rapidly growing crypto space. It sets out strict rules for how crypto companies must safeguard client assets, handle complaints, and operate across the EU. To legally offer crypto services under MiCA, firms need to secure a CASP (Crypto-Asset Service Provider) license from a national regulator.
But ESMA is worried that some firms might misuse their new regulatory credentials.
“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 said.
What’s the Concern?
In simple terms, ESMA fears that crypto firms could boast about being MiCA-regulated to build trust with customers yet still offer other products that fall outside the regulatory umbrella. That could mislead investors into thinking everything those companies offer is safe and regulated, which isn’t the case.
Spotlight on Malta
ESMA’s warning comes on the heels of a recent peer review, where it criticized the Malta Financial Services Authority (MFSA) for taking a too-lenient approach when granting crypto licenses.
While the review noted that Malta has the knowledge and resources to supervise crypto businesses, it concluded that Malta’s licensing process only “partially” met EU standards. That raises broader concerns about whether crypto firms are being held to consistent regulatory standards across all EU countries.
The Bottom Line
As crypto adoption continues to grow in Europe, ESMA’s message is clear: being MiCA-regulated is not a marketing gimmick. Crypto companies must avoid misleading investors into thinking all their products carry the same level of oversight and protection.
For investors, it’s a timely reminder to look carefully at what parts of a crypto firm’s business are truly regulated and what might not be.
