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Malta’s Financial Services Authority (MFSA) has faced scrutiny from the European Securities and Markets Authority (ESMA) for partially meeting expectations in the authorization process of a crypto asset service provider (CASP) under the Markets in Crypto-Assets Regulation (MiCA).
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The ESMA peer review highlights key areas where Malta’s regulatory approach requires enhancement to ensure consistent supervisory standards across the EU.
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According to COINOTAG, the ESMA’s ad hoc Peer Review Committee (PRC) urged the MFSA to reassess unresolved issues from the authorization process to strengthen regulatory oversight.
ESMA’s review reveals Malta’s MFSA partially met MiCA authorization standards for CASPs, urging enhanced supervision to align with EU-wide crypto regulatory frameworks.
ESMA Peer Review Identifies Gaps in Malta’s MiCA CASP Authorization Process
The European Securities and Markets Authority (ESMA) conducted a detailed peer review of Malta’s Financial Services Authority (MFSA) focusing on the authorization process for crypto asset service providers (CASPs) under the MiCA framework. While the MFSA demonstrated a solid supervisory infrastructure and adequate staffing, the review found that the authorization process for a specific CASP only partially met ESMA’s expectations. This finding underscores the challenges faced by national competent authorities (NCAs) in uniformly implementing MiCA’s regulatory standards across the European Union.
The peer review, launched in April 2025, was part of ESMA’s broader strategy to foster supervisory convergence among NCAs. The report emphasized that consistent application of authorization criteria is essential to mitigate risks inherent to crypto asset service providers, whose business models often involve complex and evolving challenges. ESMA’s PRC recommended that the MFSA conduct a thorough reassessment of any outstanding issues identified during the initial authorization to ensure robust compliance with MiCA requirements.
Implications for Malta’s Regulatory Landscape and CASP Market
Malta has positioned itself as a prominent hub for crypto businesses within the EU, with four CASPs currently licensed under MiCA: Bitpanda (BP23), Crypto.com (Foris Dax), OKX (Okcoin Europe), and ZBX (Zillion Bits). The ESMA review did not specify which CASP was subject to the partial authorization concerns, leaving the market uncertain about potential repercussions for these entities.
Industry experts, including Nathan Catania of XReg Consulting, suggest that the review’s findings are unlikely to trigger license revocations but may prompt the MFSA to tighten its supervisory practices. This aligns with ESMA’s call for all NCAs to maintain vigilant oversight and adapt authorization procedures proactively as the crypto regulatory environment evolves.
