ESMA seeks DeFi access rules, influencer curbs and site blocks in MiCA review
Victoria Shinder2 min readThe European Securities and Markets Authority has published its response to the European Commission's public consultation on the review of the Markets in Crypto-Assets Regulation. ESMA says its recommendations aim to simplify the framework while improving investor protection and covering business models MiCA does not yet handle, such as decentralised finance, staking, lending and borrowing.
On investor protection, ESMA proposes stricter rules for marketing crypto-assets, especially when they are promoted by influencers and other third parties, and proportionate requirements for staking, lending and borrowing. These would include disclosures on costs, risks, rewards, collateral and possible losses before a customer commits money.
On enforcement, it asks for stronger supervisory powers. It wants the EU to be better able to detect, block and take down fraudulent websites, and to freeze crypto-assets where market abuse or terrorist financing is suspected. It seeks reinforced powers over firms from outside the EU that solicit EU investors without MiCA authorisation, and explicit rules barring regulated firms from offering services linked to stablecoins that do not comply with MiCA.
On DeFi, ESMA calls for clear criteria for deciding which activities are genuinely decentralised, and for a new regulated crypto-asset service for firms that give users access to DeFi protocols. It also wants rules on how crypto-assets are classified, including hybrid tokens, and the power to issue binding opinions on classification, so the same product is treated the same way across the EU.
In line with the EU's simplification agenda, it proposes lighter white-paper notification procedures, less duplication in authorisation for some already regulated firms, and more consistent prudential requirements. Looking beyond the review, it calls for a framework for tokenised securities and on-chain settlement.
Why it matters
A licensed "DeFi gateway" service would regulate the front end that most users actually touch, not the protocol. Combined with binding classification opinions from ESMA, it would move key decisions from national regulators to the EU level. These are recommendations; the Commission decides what goes into its proposal.