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Strengthening Crypto Market Oversight: ESMA’s New Guidelines for Supervisory Authorities

  • Antonis Hadjicostas
  • May 3
  • 2 min read

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On 29 April 2025, the European Securities and Markets Authority (ESMA) has introduced a set of detailed guidelines aimed at helping national regulators effectively prevent and detect market abuse within the EU’s crypto-assets markets. These guidelines are a crucial component of the implementation of the Markets in Crypto-Assets Regulation (MiCA), which came into force to establish a robust regulatory framework for digital assets.


Why These Guidelines Are Critical


  • Enhance Market Confidence: Promote transparency and integrity in crypto trading.

  • Prevent Market Abuse: Detect and mitigate manipulation, insider trading, and other abusive practices.

  • Harmonize Supervision: Ensure consistent enforcement across all EU Member States, reducing regulatory gaps.


Core Principles of the Guidelines


ESMA emphasizes risk-based, proportionate supervisory approaches tailored specifically for the unique environment of crypto markets.


  • Proportionality: Supervisory measures should align with the size, complexity, and risk profile of the market participants.

  • Shared Supervisory Culture: Foster collaboration and information sharing among NCAs through an open dialogue and mutual learning.

  • Technology and Cross-Border Focus: Address the specific challenges posed by social media, innovative technologies, and the inherently cross-border nature of crypto trading.


Practical Supervisory Practices for NCAs


The guidelines outline specific actions and frameworks for regulators to implement:


Monitoring & Surveillance

  • Establish ongoing, real-time monitoring systems tailored for crypto assets.

  • Use advanced analytics and technology to identify suspicious activities.


Engagement with Stakeholders

  • Maintain open channels of communication with industry players, market participants, and other authorities.

  • Conduct regular dialogues to understand emerging risks and best practices.


Detection & Prevention

  • Implement systems to identify suspicious transactions or activities promptly.

  • Require entities to submit Suspicious Transaction or Order Reports (STORs) when anomalies are detected.

  • Develop and refine internal procedures to prevent market abuse.


Cross-Border Coordination

  • Collaborate effectively with other NCAs for cross-jurisdictional cases of market abuse.

  • Share intelligence, coordinate investigations, and enforce regulations uniformly across borders.


Integration of Existing Practices

  • Adapt current supervisory tools and processes to suit the crypto environment.

  • Ensure that new surveillance and detection methods are compatible with existing legal and regulatory frameworks.


Promoting Market Integrity

  • Encourage industry initiatives aimed at self-regulation and ethical conduct.

  • Organize awareness programs to educate market participants on market abuse risks.


Reaction to Suspicious Activity

  • Establish clear procedures for responding to suspicious transaction reports.

  • Ensure swift, coordinated enforcement actions to address violations.


ESMA and NCA Coordination

  • Coordinate with ESMA and other national authorities to ensure a unified approach.

  • Participate in cross-border enforcement actions and share best practices.


Addressing Third-Country Obstacles

  • Identify and mitigate barriers to effective supervision in cross-border crypto markets.

  • Engage with non-EU regulators to facilitate cooperation and enforcement.


Implementation Timeline


Guidelines are to be finalized and communicated by June 30, 2025.


Conclusion


These comprehensive guidelines serve as a blueprint for EU regulators to strengthen oversight of crypto markets. By emphasizing risk-based, technology-driven, and collaborative supervision, ESMA aims to create a safer, more transparent environment that protects investors and enhances market integrity across Europe.

 
 

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