- ESMA adopts new crypto guidelines under MiCA
- It aimed at preventing and detecting market abuse in crypto markets
- It’s mandatory for all CASP providers and enters into force three months after publication
ESMA adopts new crypto guidelines under MiCA aimed at the prevention and detection of market abuse in crypto markets. The rules are mandatory for all CASP providers — including exchanges, brokers, and custodians — and will take effect three months after their official publication in the EU.
What Do the New ESMA Guidelines Include?
The new ESMA guidelines outline the need to monitor and prevent key forms of market manipulation, including:
- Front-running — executing trades in advance based on confidential information
- Wash trading — generating artificial volume through self-trading
- Spoofing and layering — placing fake orders to manipulate prices
To detect and prevent such practices, CASP firms are required to:
- Implement automated systems for monitoring suspicious activity
- Appoint a responsible officer in charge of ensuring market integrity compliance
- Establish internal escalation and reporting procedures
- Submit reports of suspicious behavior to their National Competent Authorities (NCAs)
The guidelines will enter into force three months after their official publication in the Official Journal of the EU and will be mandatory for all CASPs operating under EU jurisdiction, including crypto exchanges, brokers, and custodians.
Conclusion
Europe is clearly stepping up its regulatory approach to crypto, following the broader trend led by the United States. Notably, the UK also published its own crypto regulatory framework just yesterday. Stay tuned for updates, and be adaptive in the rapidly evolving regulatory, financial, and crypto landscape.
