Crypto Custodians Face Stringent ESMA Review Post-MiCA Licensing
Vexoda Newsroom
As crypto custodians secure MiCA licenses, European regulators are now focusing on their operational resilience. This shift could redefine security standards and influence future regulations.
The European Securities and Markets Authority (ESMA) has initiated a Common Supervisory Action (CSA) to assess the operational resilience of crypto asset service providers (CASPs), marking a significant step post-MiCA licensing. The review centers on custody services, with ESMA evaluating CASPs' digital operational resilience frameworks.
Sebastien Dessimoz from Taurus highlighted that obtaining a MiCA license is merely the start line for custodians, emphasizing the need to prove security and resilience rather than just claim it. This shift reflects an increasing focus on real-world risk management in regulated financial infrastructure.
Industry executives like Jody Mettler of BitGo noted that institutional clients are now demanding more detailed information about custody provider controls, including asset segregation, access management, incident response, and business continuity during market stress periods.
The review is part of a broader EU regulatory framework, intertwining the MiCA framework with the Digital Operational Resilience Act (DORA). This dual assessment poses challenges for CASPs as they must prove resilience across their supply chain while adhering to both sets of regulations simultaneously.
Legal experts like Yuriy Brisov predict that these findings could set a benchmark for future regulatory assessments and discussions on centralized crypto supervision in the EU. The review may also influence ongoing debates about MiCA’s implementation and the potential centralization of CASP supervision from national regulators to ESMA.
As institutional adoption grows, robust operational resilience will be crucial for custodians looking to maintain their competitive edge. Traders should closely monitor how this regulatory push impacts market dynamics and security standards in the crypto space.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.