ESMA Puts Malta’s Crypto Oversight Under the Microscope—Is MiCA at Risk?

The European Securities and Markets Authority (ESMA) has developed a framework for a coded currency license in Malta under review, which raised concerns about how to intimidate the island’s Financial Supervision Authority from COSPS service providers (CASPS).

Evaluation, Published On Thursday, it focuses on the behavior of the MFSA Financial Services Authority (MFSA) and its operations under the list on markets in encrypted assets (MICA), which actually entered throughout the European Union in June 2024.

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The ESMA (PRC) review committee conducted a targeted assessment of the MFSA license for CASP whose name was not revealed, as the organizer recorded where the organizer limited. While it turned out that MFSA has sufficient infrastructure for employees and technology, the review noted that it “partially fulfills expectations” during the approval process.

The European Control Authority emphasized that the fears that extend beyond Malta, and urged all the National Union national authorities (NCAS) to harmonize its control mechanisms to ensure consistency across the judicial states under MICA.

The peer review arose in the supervisory practices of Malta from the decision of the ESMA Supervisors (BOS) decision in April 2025. The previous steps taken in December 2024 were followed when BOS and the European Banking Authority adopted a consistent approach to supervising the CASP licenses under MICA.

According to the ESMA report, although the review targeted one country, its intention is to enhance organizational rapprochement throughout the European Union with an increase in MICA implementation.

PRC has analyzed three main dimensions of encryption regulation in Malta: the supervisory structure, employment operations, delegation, and supervision measures after the license. MFSA was praised due to a sufficient level of experience and resources to support CASP supervision.

However, the ESMA report referred to gaps in how the agency dealt with material issues during the mandate stage. It recommended that MFSA improve its ability to assess issues that have not been resolved, unlimited or unlimited can appear after approval.

It calls for rapprochement through the supervisors of the European Union

The ESMA report indicates the importance of organizational consistency, especially since the new encryption companies seek to license under MICA. In particular, the People’s Republic of China warned that national organizers should quickly adapt to the growing application sizes and advanced risk features to supply.

“Because of the modernity and nature of these types of entities as well as the underlying risks of their business model, PRC recommends all NCAS … to pay special attention to certain aspects of the mandate,” the committee said.

While Malta has historically put herself as a friendly judicial authority within the European Union, the ESMA review shows the changing expectations facing all member states.

With MICA designed to eliminate organizational pleasures and create a playing field at a level, NCAS will need to align not only their licenses, but also from its supervisory capacity and enforcement strategies.

Moving forward, organizational coordination and transparency are likely to become essential criteria for assessing the effectiveness of national encoding.

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