Malta's process for licensing crypto asset service providers (CASPs) has come under scrutiny from the European Securities and Markets Authority (ESMA), which identified key deficiencies.
Overview of ESMA’s Review
In a review published Thursday, ESMA indicated that the Malta Financial Services Authority (MFSA) only 'partially met expectations' when authorizing one CASP under the EU’s new MiCA regulations. The regulator questioned the rigor of its applicant vetting procedures.
Report on Crypto Firms in Malta
The report states that currently four crypto firms are listed in Malta’s MiCA register: Bitpanda (BP23), Crypto.com (Foris Dax), OKX (Okcoin Europe), and ZBX (Zillion Bits). However, it did not specify whether any of these were involved in the review. In April, Okcoin Europe was fined €1.2 million for compliance failures related to its activities.
Implications for Future Licensing
ESMA recommended that the MFSA intensify its monitoring of new applicants and reassess any material issues unresolved at the time of granting licenses. These findings could have implications for other EU regulators preparing to license crypto firms under MiCA.
The findings of the ESMA review highlight the importance of stringent oversight in the licensing of crypto assets, which may have long-term consequences for Malta and other EU countries.