European Clampdown: Crypto Companies Under Scrutiny

Europe's securities watchdog, the European Securities and Markets Authority (ESMA), has issued a stern warning to crypto firms, advising against misleading practices regarding the regulation of their products. This announcement marks a continued effort by European regulators to curb risks associated with the burgeoning crypto sector.

According to ESMA, crypto asset service providers (CASPs) often blur the lines by offering both regulated and unregulated products through a single platform. Such practices pose significant investor protection risks under the EU's crypto regulatory framework, MiCA. In particular, investors might be unaware of which products are fully compliant with MiCA regulations.

ESMA says these companies should refrain from using their regulated status as a marketing strategy, implying that all their offerings are regulated when they might not be. The organization also stressed the need for staff to be well-versed in crypto assessments. This guidance follows a review into Malta's licensing practices, which highlighted gaps in rigor.

(With inputs from agencies.)