The European Securities and Markets Authority (ESMA) hopes to finalize some of the competency requirements for employees of crypto-related companies. This week, ESMA released a proposal that is consistent with EU mica regulations, seeking feedback from crypto asset service providers, investors and financial institutions with cryptocurrency assets. As part of its proposal, ESMA outlines standards such as minimum qualifications and job history so that crypto companies check before hiring employees. By introducing this step, the regulator said it wants to ensure that only those with the right risk and knowledge of crypto assets can interact with investors and help them make informed decisions.
The Paris-based agency released a consultation document on Monday in line with the EU’s crypto-focused mica rules. Through these guidelines, ESMA aims to ensure that cryptocurrency companies employ “natural persons” that are knowledgeable enough to provide corporate clients and investors with crypto-related advice.
“The draft guide is designed to ensure standards for assessing knowledge and competence, thereby effectively providing information or advice on cryptocurrencies, effectively addressing the functions and risks of specific crypto asset markets and services and not prominent in traditional finance or There is no market,” the ESMA paper said.
Key Highlights of the ESMA Draft Guide
The draft ESMA’s guidance divides its recommendations into four parts. Feedback questions were added in each section to get industry stakeholders to cope.
Crypto-related service providers have been asked to ensure that their staff know, understand and comply with the first guidelines in line with Mica’s internal policies. Crypto companies have been asked to conduct at least an annual assessment to review the knowledge of their staff, especially those responsible for providing financial advice on cryptocurrency investments to their clients.
A second proposed guide directs cryptocurrency companies to regularly verify whether their staff are aware of the volatility and cybersecurity risks associated with the virtual digital asset (VDA) industry.
Additionally, ESMA here says that every employee working in a cryptocurrency company must meet the minimum professional qualification standards and be consistent with existing national frameworks such as Mifid II and receive ongoing professional development (CPD) training to Latest training developments.
According to the third and fourth guidelines, ESMA recommends that crypto companies maintain a review of their employees’ renewal capabilities and provide employees with minimal CPD transaction time.
Regulators have asked industry stakeholders to agree to the guideline or add recommendations. They can also raise questions about the proposal that are unclear. ESMA said it will consider all comments submitted by April 22. The reply will also be published publicly after April 22.
The EU’s mica regulations come into effect on December 30, 2024. The legislation was completed in 2022 to ensure that crypto-related practices are safe for industry and investor interactions. From licensing requirements to cleaning business practices, the guidelines cover a wide range of DOS and NOTS for Web3 companies that want to operate in 27 EU countries.
Kraken, Bitpanda, OKX, Crypto.com and Chartered Chartered have received official mica approval in recent months to operate their business in the EU.
