European Securities Market Supervisory Authority has proposed mandatory background checks for crypto firms

The focus is on ensuring advisors can clearly communicate the risks and complexities of digital assets to clients

18.02.2025 - 13:10

2 min

What’s new? The European Securities and Markets Authority (ESMA) has proposed a new framework that would require each firm’s staff to have sufficient competence. The new proposed framework sets out basic qualification requirements and calls for ongoing staff training.

According to the guidelines, companies should ensure that their staff working with crypto services have both theoretical knowledge and practical skills. These include an understanding of blockchain, risk management, and legal liability in crypto transactions. Regular training will also be necessary to help professionals stay on top of regulatory updates and market trends.

What else is known? With the new standards, ESMA is working to close the gap between traditional finance and the digital economy. Unlike banks and investment firms, where staff qualifications are strictly regulated, the crypto space is largely self-governing. These measures aim to increase trust among service providers and improve consumer protection.

The focus is on ensuring that advisors and representatives can clearly communicate the risks and complexities of digital assets to clients. Cryptocurrencies can be volatile, making it difficult for investors to distinguish between safe opportunities and high-risk ventures. By requiring professional qualifications, ESMA hopes to reduce misinformation and strengthen market integrity.

The supervisor has called on industry stakeholders to share their feedback before finalizing the rules. The deadline for comments is April 22, 2025. This consultation period will play a key role in clarifying the implementation of these standards and addressing any concerns of market participants. Once adopted, the recommendations will become a core part of the regulatory framework of the draft law on the regulation of cryptocurrencies in the European Union (MiCA).

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