The European Securities and Markets Authority (ESMA) has recently initiated a public consultation on guidelines aimed at assessing the knowledge and competence of professionals providing crypto-asset services under the Markets in Crypto-Assets Regulation (MiCA). This move by ESMA is part of a broader effort to standardize the qualifications and experience required for individuals offering advice or information on digital assets.
The draft guidelines put forth by ESMA set out specific criteria for professional qualifications, work experience, and ongoing education for staff working at crypto-asset service providers (CASPs). According to the proposal, individuals providing investment advice on crypto-assets must meet more stringent competency requirements compared to those offering basic informational services. Advisors are required to hold a tertiary education degree or equivalent, complete at least 160 hours of professional training, and have a minimum of one year of relevant experience. On the other hand, individuals providing general information on crypto-assets would need a professional qualification of at least 80 hours and six months of supervised experience. Furthermore, all professionals in this space must undergo an assessment exam and participate in continuous training – a minimum of 10 hours annually for information providers and 20 hours for advisors – to ensure they stay abreast of the latest developments in the industry.
ESMA’s guidelines also underscore the importance of understanding the unique risks associated with crypto-assets, such as market volatility, cybersecurity threats, blockchain governance, and liquidity risks tied to major asset holders. In addition, the regulator proposes that firms conduct annual internal reviews to evaluate staff compliance with these standards.
The timing of this consultation aligns with the rollout of MiCA’s regulations governing crypto-asset services across the European Union, with full implementation expected by 2025. MiCA aims to establish a unified legal framework for digital assets, covering aspects like transparency, investor protection, and prudential oversight. ESMA emphasizes that the rapid growth of the crypto industry necessitates higher operational standards to safeguard investors.
ESMA is seeking feedback on the proposed guidelines from various stakeholders, including CASPs, investors, financial institutions, and industry associations. Comments will be accepted until April 22, 2025, with the final guidelines expected to be published in the third quarter of the year.
In conclusion, ESMA’s efforts to set minimum competency standards for professionals in the crypto-asset space are a significant step towards ensuring investor protection and market integrity in the rapidly evolving digital asset landscape. By establishing clear guidelines and requirements, ESMA aims to enhance the overall quality of services provided in this sector.