EU Watchdog Identifies Gaps in Malta's Crypto Authorization Process

The European Securities and Markets Authority (ESMA) has raised concerns about Malta's implementation of the Markets in Crypto-Assets Regulation (MiCA), particularly regarding its authorization of crypto asset service providers (CASPs). In a July 10 review, ESMA's Peer Review Committee found Malta's Financial Services Authority (MFSA) only "partially met expectations" when licensing an unnamed CASP, though it acknowledged adequate supervisory resources.

Three Critical Assessment Areas

ESMA's evaluation focused on: • Supervisory framework adequacy • Authorization process rigor • Post-licensing oversight capabilities

While Malta scored well on structural elements, the report highlighted 【4 specific deficiencies】 in the CASP approval process. The regulator recommended closer monitoring of pending issues during authorization phases, suggesting some matters required resolution before approval rather than through subsequent supervision.

Context of the Regulatory Review

The assessment comes exactly one year after MiCA's June 2024 implementation, designed to standardize crypto regulation across the EU. ——This marks the first public critique of a national regulator's MiCA compliance—— since the framework took effect.

Notably, MFSA has authorized 【4 major crypto platforms】 under MiCA: 1. Bitpanda (BP23) 2. Crypto.com (Foris Dax) 3. OKX (Okcoin Europe) 4. ZBX (Zillion Bits)

Industry Reactions and Implications

XReg consulting partner Nathan Catania noted: "Without knowing the specific unresolved issues, it's difficult to predict concrete consequences." Meanwhile, MiCA Crypto Alliance's Juan Ignacio Ibañez characterized the review as "largely positive," downplaying risks to existing licenses.

The report coincides with Malta's April 2025 【$1.2 million fine】 against OKX Europe for pre-MiCA anti-money laundering violations. However, experts suggest the ESMA findings reflect procedural differences rather than fundamental non-compliance.

Broader Impact on EU Crypto Regulation

ESMA emphasized that all national regulators must maintain consistent authorization standards under MiCA. The watchdog plans to use Malta's case to strengthen supervision across the bloc, particularly as more CASPs seek licenses before MiCA's full implementation deadline in December 2025.

——The outcome could influence how other EU members balance regulatory rigor with fostering innovation—— in their crypto licensing approaches. Industry observers will watch for potential updates to Malta's authorization processes in response to ESMA's recommendations.