EU Watchdog Wants Crypto Exchanges and Companies Staff to Hit the Books
The
European Securities and Markets Authority (ESMA) has unveiled comprehensive
guidelines requiring crypto-asset service providers to ensure their staff meet
stringent knowledge and competency standards. This marks a significant step toward
professionalizing the industry under Markets in Crypto-Assets (MiCA) regulation.
ESMA Proposes
Strict Knowledge Standards for Crypto Service Providers
The
proposed framework, released today (Monday) in a consultation paper,
establishes minimum qualification requirements and mandatory continuous
professional development for staff providing crypto-asset advice and
information to clients.
“ESMA launched
a consultation on the criteria for the assessment of knowledge and competence
of crypto-asset service providers’ (CASPs) staff giving information or advice
on crypto-assets or crypto-asset services,” the regulator commented.
Under the
proposed rules, staff providing crypto advice must complete at least 20 hours
of annual professional development, while those giving information need a
minimum of 10 hours. The guidelines also mandate specific qualifications and
experience requirements, with advisors needing either a three-year tertiary
degree plus one year of supervised experience or alternative combinations of
education and practical experience.
#ESMA launched a consultation on the criteria for the assessment of knowledge and competence of crypto-asset service providers’ staff giving information or advice on #CryptoAssets or crypto-asset services. 🗓️ Send your comments by 22 April 2025 → https://t.co/9t4at6MKzf. pic.twitter.com/NFUY7IV6dZ
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) February 17, 2025
The move
comes as retail investors increasingly access crypto markets through various
platforms, often with a limited understanding of the associated risks. ESMA noted
that while crypto awareness has grown significantly, comprehensive knowledge
among market participants remains limited.
Know Your Stuff
The
guidelines distinguish between staff providing general information and those
offering advice, with higher standards applied to advisory roles.
Service
providers must ensure their staff understand key aspects of crypto assets,
including:
- Distributed
ledger technology fundamentals - Market
functioning and pricing mechanisms - Cybersecurity
risks and protection measures - Regulatory
frameworks and investor protection considerations - Tax
implications and cost structures
Crypto
service providers will be required to assess staff competency annually and
maintain detailed records for regulatory review. New staff members without
required qualifications can only work under supervision for a maximum of four
years.
MiCA Updates
The
consultation period runs until April 22, 2025, with ESMA expected to publish
final guidelines in the third quarter of 2025. The rules will become effective
60 days after publication in all official EU languages.
These
requirements could significantly impact smaller crypto service providers who
may struggle to meet enhanced training and supervision requirements. However,
larger institutions may generally welcome the move as a step toward greater
market maturity.
The
guidelines complement MiCA, which
became applicable for crypto-asset services in December 2024, establishing
a comprehensive regulatory framework for the crypto industry in the European
Union.
In January
2025 the regulator introduced stricter rules on how crypto companies handle
potential conflicts of interest. The new requirements represent a fundamental
shift in how these firms operate, potentially requiring
them to create separate legal entities when offering services that might clash
with each other. The regulations also put the spotlight on monitoring
personal transactions within these companies and expand what counts as
compensation.
This article was written by Damian Chmiel at www.financemagnates.com.