The European Securities and Markets Agency (ESMA) has launched public consultations on guidelines for assessing the knowledge and capabilities of professionals in providing crypto asset services in the Crypto Asset Regulation (MICA) market.
The consultation, published on February 17th, aims to standardize the qualifications and experience required by individuals who advise or notify clients about digital assets.
Minimum ability standards
The Draft Guidelines establish clear standards for professional qualifications, work experience and continued education for staff employed by Crypto-Asset Service Providers (CASPs).
Under the proposal, individuals providing investment advice on crypto assets must meet stricter capabilities requirements than those providing basic information services.
The ESMA outlined that advisors must have a higher education degree or equivalent degree, receive at least 160 hours of professional training, and have at least one year of relevant experience. Those who provide general information about crypto assets require a professional qualification with at least 80 hours and six months of supervised experience.
All experts must complete assessment exams and continuous training and complete continuous training to ensure that their knowledge remains up to date.
The guidelines also highlight the importance of understanding crypto-specific risks, such as market volatility, cybersecurity threats, blockchain governance, and liquidity risks associated with key asset owners.
Additionally, ESMA proposes that companies conduct annual internal reviews to assess staff compliance for these standards.
Regulatory implications
The consultation is due to the provisions of MICA that manage Crypto-Asset services, which are expected to be fully implemented in 2025, will come into effect throughout the EU. Regulations seek to establish a harmonious legal framework for digital assets that cover transparency, investor protection and careful surveillance.
ESMA noted that growth in the crypto industry requires higher operating standards to ensure investors remain protected.
According to regulators:
“The rapid expansion of the crypto market has led to increased risk, especially for retail investors. Ensuring service providers maintain baseline level expertise is a factor for investors' protection and market integrity. It's important.”
The guidelines are closely aligned with existing MIFID II rules for financial markets, but introduce crypto-specific considerations, reflecting the unique nature of blockchain-based assets.
Market participants, including CASPs, investors, financial institutions and industrial associations, are invited to provide feedback on the proposed criteria.
ESMA will accept comments until April 22, 2025 and will publish final guidelines in the third quarter of the year.
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