Summary
The European Securities and Markets Authority (ESMA) conducted a thorough review of Malta’s handling of the Markets in Crypto Assets (MiCA) authorization. This investigation particularly scrutinizes the quick approval given to a specific crypto asset service provider (CASP), emphasizing that serious issues were still lingering at the time of the authorization.
Key Findings
- Peer Review: ESMA’s focus was on an unnamed crypto asset service provider that received clearance despite unresolved problems.
- The Role of OKX: A notable point included the crypto exchange OKX, which recently obtained pre-authorization in Malta and disclosed a significant $500 million agreement with the U.S. Department of Justice.
Malta
Malta (Ludovica Dri/Unsplash)
Detailed Overview
- ESMA’s Review Process: The peer review concentrated on the specific authorization process for CASP entities. It was noted that materials were still in flux and unresolved before the green light was given.
- Concerns Raised: The PRC highlighted issues regarding why Malta’s Financial Services Authority (MFSA) did not utilize the authorization process to ensure all necessary remedies were implemented prior.
“On the authorization process of the CASP entity, the PRC questions the timing of the authorization of the specific entity under MiCA given that several material issues remained unresolved at the time of authorization.”
“It is unclear to the PRC, why MFSA did not leverage on the authorization process to ensure that the entity would remedy key deficiencies before the authorization would be effective.”
This report denotes a crucial examination for Malta, as its reputation in blockchain authorization is under state scrutiny due to events surrounding expedited licenses several exchanges have received, potentially signaling concerns about regulatory efficacy.
Moving Forward
The MFSA acknowledged the findings, affirming its commitment to enhancing the supervisory framework as it continues to navigate the evolving crypto landscape.
