Daily newsHot NewsHot TopicReleases

Malta’s MiCA Licensing Faces EU Scrutiny by ESMA

Key Takeaways

  • Partial Compliance: Malta’s financial regulator MFSA “partially met expectations” in licensing a specific crypto asset service provider under MiCA
  • EU Oversight: European Securities and Markets Authority (ESMA) conducted peer review of Malta’s licensing process starting April 2025
  • Four Licensed CASPs: Malta has approved four crypto companies under MiCA: Bitpanda, Crypto.com, OKX, and ZBX
  • No Immediate Risk: Experts believe existing licenses are not at significant risk despite the assessment findings
  • Regulatory Differences: The issue may stem from different approaches between ESMA and MFSA on pre-licensing vs. ongoing supervision

Malta’s cryptocurrency licensing process faces intense scrutiny from the European Securities and Markets Authority (ESMA), the EU’s top supervisory body for the Markets in Crypto-Assets (MiCA) regulation.

European Securities and Markets Authority headquarters Source: Bloomberg

On Thursday, ESMA published its assessment of the Malta Financial Services Authority’s (MFSA) approach to licensing crypto asset service providers (CASPs), highlighting certain shortcomings and issuing several recommendations for improvement.

While ESMA acknowledged that MFSA had the appropriate supervisory setup and staffing in place, the regulator concluded that Malta’s authority only “partially met expectations” in the licensing of one unnamed CASP.

Following the review, ESMA’s Peer Review Committee (PRC) recommended that MFSA address major unresolved issues either before or during the licensing process, rather than leaving them for post-approval monitoring.

Assessment Launched in April

The report comes more than a year after MiCA officially took effect on June 29, 2024, marking a major milestone in Europe’s digital asset regulation landscape. Since MiCA aims to provide a unified and consistent legal framework for cryptocurrencies in the EU, the regulator emphasized that MiCA’s licensing methodology applies to all National Competent Authorities (NCAs).

Malta Financial Services Authority building
Malta Financial Services Authority headquarters Source: Times of Malta

In December 2024, the European Banking Authority’s Board of Supervisors adopted a coordinated strategy for CASP licensing across the EU.

“Following a series of events, in April 2025, ESMA’s Board of Supervisors decided to conduct a peer review of the Malta Financial Services Authority’s early CASP licensing and supervision,” the report noted, adding:

“Although the peer review targets one NCA, its purpose remains to promote supervisory convergence and improve all NCAs’ supervisory practices, at a time when consistency among NCAs in authorization and setting supervisory expectations is key.”

MFSA’s Authorization Falls Short of Expectations

ESMA’s Peer Review Committee acknowledged that MFSA had “developed solid expertise” in the crypto field and had adequate resources to supervise and license CASPs.

CASP regulation under MiCA
Crypto Asset Service Provider regulation framework Source: Global Law Experts

The review assessed MFSA across three areas: supervisory setup and resourcing, licensing procedures, and supervision methods including use of regulatory powers. While MFSA met expectations in supervisory setup and largely satisfied expectations in supervision, ESMA said the authority only “partially met expectations” in its licensing procedure for a particular CASP.

The report also reinforced that all NCAs across the EU need to be aligned with MiCA’s strict standards, stating:

“Due to the novelty and nature of these types of entities as well as the inherent risks in their business models, the PRC recommends that all NCAs currently in the process of licensing CASPs pay particular attention to certain aspects of licensing.”

Impact on Existing Licenses

Since ESMA didn’t disclose the name of the CASP involved in MFSA’s licensing deficiencies, it’s unclear whether the PRC’s recommendation to assess issues affects any already-issued licenses.

According to what Nathan Catania – consulting partner at XReg shared with Cointelegraph: “It’s difficult to comment without knowing exactly what the unresolved issues are.” He added: “I don’t expect any revocations or reassessments based on the report.”

Juan Ignacio Ibañez, secretary general of the MiCA Crypto Alliance, shared a similar outlook, describing the report as “largely positive.” Speaking with Cointelegraph, he emphasized that he doesn’t see a significant threat to the validity of existing licenses: “I don’t see significant risk to existing licenses,” he said, noting that ESMA has no direct legal authority over national regulators.

According to Ibañez, the issue likely stems from a difference in regulatory philosophy between the two authorities. “MFSA seems to believe some issues can be addressed through ongoing supervision, while ESMA believes MFSA should leverage the threat of license denial to resolve issues before licensing,” he explained.

Four MiCA CASPs Licensed by MFSA

According to MFSA’s registry of CASPs licensed to operate under MiCA, there are currently four registered companies.

Major cryptocurrency exchanges logos
Major cryptocurrency exchanges including licensed CASPs Source: CoinTracker

These include BP23 (operating as Bitpanda), Foris DAX (Crypto.com), Okcoin Europe (OKX), and Zillion Bits (ZBX). All four companies are active across EU markets and are widely regarded as prominent players in the region’s digital asset landscape.

In April, Malta’s Financial Intelligence Analysis Unit also began tightening oversight of CASP operations under anti-money laundering regulations, reflecting the country’s broader push to stay in step with EU-wide compliance standards.

Cointelegraph reached out to both ESMA and MFSA for comment on the peer review’s potential impact, but no responses were available at the time of publication.