The European Securities and Markets Authority （ESMA） has issued a warning about the risks posed by global crypto firms seeking partial authorization under MiCA while operating offshore.
Points
- ESMA highlights risks from global crypto firms operating offshore.
- Calls for scrutiny of business models by National Competent Authorities （NCAs）.
- Emphasis on consumer protection and fair competition.
- Offshore operations can undermine EU consumer protection.
The European Securities and Markets Authority （ESMA）, the regulatory body overseeing the EU’s financial markets, has issued a new Opinion highlighting the considerable risks posed by global crypto firms that seek partial authorization under the Markets in Crypto Assets （MiCA） regulation while conducting significant operations offshore.
On July 31, the ESMA released its MiCA-related opinion statement, emphasizing the intricate organizational structures of many global crypto firms. These firms often use EU-authorized brokers to route orders to execution venues outside the EU, typically in offshore jurisdictions. This practice can undermine consumer protection and create an uneven playing field, disadvantaging EU-based execution venues.
Complex Structures and Consumer Risks
To address these concerns, ESMA has called on National Competent Authorities （NCAs） within individual EU member states to rigorously scrutinize the business models of these global firms during the authorization process. ESMA’s goal is to ensure that these firms comply fully with MiCA’s regulations to safeguard consumers and maintain the integrity of the crypto industry.
Execution venues for crypto-assets play a crucial role in the overall function of the crypto-asset ecosystem. According to ESMA’s Opinion, “While most crypto-asset conglomerates are expected to operate a multilateral trading platform outside the EU, there could also be cases where the non-EU entity is rather internalizing the order flow, executing orders coming from EU clients on their own account.” Therefore, it is vital to ensure that these firms adhere to MiCA’s regulations to protect consumers and maintain industry integrity.
解説
- ESMA’s warning underscores the importance of strict regulatory compliance for global crypto firms operating in the EU.
- Offshore operations can pose significant risks to consumer protection and fair competition within the EU market.
- National Competent Authorities （NCAs） play a crucial role in scrutinizing and enforcing compliance with MiCA regulations.