The European securities watchdog ESMA has warned crypto companies not to incorrectly promote their mica-regulated status to prevent misleading investors.
The authority of the European Securities and Markets issued a warning on Friday to Crypto companies and forced them to not use their regulated status under the EU’s mica framework, as a promotion tool, as initially reported by Reuters.
For context, the MICA regulation aimed at protecting investors by imposing strict rules on how customer assets are protected and how complaints are treated. Under Mica, companies that offer crypto services must obtain a CASP license from a national supervisor to operate throughout the EU.
“Some CASPs can even use their regulated status under MICA as a marketing argument and encourage confusion between regulated and non -regulated products and services,” the regulator said.
Simply put, ESMA says that some crypto companies can brag about mica-regulated to attract customers, but at the same time they offer other products that are not regulated. This can confuse people by thinking that all their products are safe and protected if that is not true.
ESMA’s warning follows the publication of a recent peer review in which the criticized Malta’s Financial Services Authority for its lax approach when granting crypto licenses. The assessment showed that although Malta has the expertise and resources to supervise crypto companies, the authorization process only “partially” met the expected standards, so that concern about the consistency of regulations throughout the EU.
