The European Securities and Markets Authority (“ESMA”) has published its Consultation Paper on Guidelines for assessing knowledge and competence under the Markets in Crypto-assets Regulation (“MiCA”), as mandated by Article 81(15). The consultation, released on 17 February 2025, proposes new guidelines ensuring that all crypto-asset service providers (“CASPs”), including those providing information rather than direct advice, meet appropriate knowledge and competence standards. This initiative aims to mitigate risks associated with the increasing retail participation in crypto markets, where investor understanding remains limited.
General Requirements
ESMA outlines that CASPs must take adequate steps to ensure that their staff responsible for providing information or advice on crypto-assets and related services possess the requisite knowledge and competence. This includes a deep understanding of internal policies and regulatory obligations under MiCA.
A principle of proportionality is introduced, where staff providing advice must demonstrate a higher level of knowledge and competence compared to those merely providing information. CASPs are required to implement organizational measures to assess, maintain, and update staff knowledge and competence on an ongoing basis. Management must conduct an annual review of compliance policies to ensure continued adherence.
Knowledge and Competence Criteria
Staff providing information on crypto-assets must understand:
- The fundamental characteristics and risks of crypto-assets, including volatility and cybersecurity threats.
- The operational structure of crypto-asset markets and their influence on pricing and valuation.
- The specific risks and features of crypto-assets offered by the CASP.
The draft guideline also stipulates minimum professional qualification and experience requirements, as well as a mandated number of professional development hours each year.
Relevance for ECSPR Actors
While the guidelines target CASPs under MiCA, they hold potential implications for actors operating under the European Crowdfunding Service Providers Regulation (“ECSPR”), particularly those engaging in investment-based crowdfunding involving tokenized assets or blockchain-based financial instruments. Key considerations for such actors include:
- Compliance Expectations: ECSPR platforms offering investment opportunities in tokenized securities or digital assets may need to align with MiCA standards, particularly if their offerings intersect with crypto-asset services.
- Investor Protection and Education: Given the concerns over retail investors’ limited understanding of crypto-assets, ECSPR platforms facilitating crypto-based investments may need to bolster their investor education initiatives to meet regulatory expectations.
- Staff Training: Crowdfunding service providers dealing with tokenized securities should consider incorporating similar staff training requirements to ensure compliance with evolving regulatory frameworks.
- Regulatory Convergence: As MiCA and ECSPR both aim to enhance investor confidence and market integrity, there may be future convergence in knowledge and competence requirements for professionals operating under both frameworks.
Next Steps
Stakeholders have until 22 April 2025 to submit responses to ESMA’s consultation. The final guidelines are expected in the third quarter of 2025. ECSPR actors dealing with tokenized crowdfunding should closely monitor these developments and assess potential compliance adjustments in advance.
