Yesterday, ESMA published its Final Report on Guidelines under MiCA for the prevention and detection of market abuse, two months ahead of the deadline set by Article 92(3) of MiCA. These Guidelines will become applicable within three months following their publication in all EU languages, provided that National Competent Authorities (NCAs) declare their intention to comply.
The report marks a significant regulatory milestone by introducing a supervisory framework inspired by the Market Abuse Regulation (MAR), but adapted to the unique risks and characteristics of crypto-asset markets under MiCA (Regulation EU 2023/1114).
Key Operational Impacts for NCAs and PPAETs
While the Guidelines cover several supervisory dimensions, three areas stand out in terms of operational and strategic consequences for both NCAs and Persons Professionally Arranging or Executing Transactions (PPAETs):
1. Integration of Existing Supervisory Practices (Section 4.3)
ESMA encourages NCAs to build upon their existing market abuse frameworks developed under MAR, adapting them to crypto-specific threats. Key recommendations include:
- Extending monitoring tools to detect manipulative practices inherent to blockchain technologies (e.g., abusive MEV strategies, token supply manipulation).
- Actively monitoring social media and web-based platforms, recognizing their disproportionate role in disseminating false or misleading information in crypto markets.
- Adapting insider dealing surveillance to new actors such as validators and miners, whose technical roles may allow them to exploit inside information (e.g., via frontrunning).
These directives imply a substantial technological and analytical upgrade in NCAs’ surveillance capabilities and a shift in focus towards real-time, decentralised, and online environments.
2. Strengthening Monitoring and Surveillance by NCAs (Section 4.8)
ESMA urges NCAs to develop data-driven surveillance strategies combining:
- Regulatory data collected from CASPs,
- On-chain and off-chain data reconciliation, and
- Automated media and social platform monitoring to detect patterns, emerging risks, and market manipulation schemes.
This approach goes beyond traditional supervision and places crypto asset surveillance into a realm requiring advanced data analytics, AI-assisted monitoring, and cross-platform integration.
The Guidelines explicitly suggest a risk-based and proactive posture, compelling NCAs to address threats without undue delay and maintain the ability to act swiftly and conclusively when risks are identified.
3. Supervisory Limitations in Cross-Border and Third-Country Scenarios (Section 4.12)
Recognizing the global and decentralised nature of crypto trading, ESMA addresses the structural limitations faced by NCAs when overseeing activities conducted or routed through non-EU jurisdictions.
In particular, NCAs are expected to:
- Identify CASPs whose business models may obstruct the detection of market abuse (e.g., systematic execution through offshore platforms),
- Flag challenges in cross-border cooperation and lack of access to transactional or identity data,
- Collaborate with ESMA to develop common EU-level approaches when such barriers arise.
This section underscores the regulatory asymmetry between the EU and third countries and the importance of strategic coordination at the Union level to avoid enforcement gaps.
Conclusion: A New Supervisory Paradigm for Crypto Markets
This report signals ESMA’s commitment to shaping an harmonised supervisory culture for crypto-assets in EU, one that demands technological agility, cross-jurisdictional cooperation, and proactive engagement with market participants.
PPAETs and CASPs are urged to assess their internal systems in light of these Guidelines, particularly concerning data reporting, surveillance infrastructure, and cooperation with regulators. The capacity to pre-empt and respond to supervisory expectations will be critical as the EU transitions toward a post-MiCA regulatory regime.
For any questions or assistance in implementing the new ESMA framework, our firm is available to support your compliance efforts.