The European Securities and Markets Authority (ESMA) has released a consultation paper outlining proposed guidelines to assess the knowledge and competence of individuals providing crypto-asset services under the Markets in Crypto-Assets (MiCA) regulation. 

The guidelines, open for public consultation until April 22, 2025, aim to ensure that professionals offering advice or information on cryptoassets meet minimum standards of expertise.

The MiCA regulation, which came into effect on December 30, 2024, seeks to establish a uniform framework for crypto-assets across the European Union (EU). 

A key element of this regulation is ensuring that those advising retail investors or providing information about crypto-assets possess adequate knowledge and competence to protect consumers and maintain market integrity.

According to ESMA’s proposed criteria, crypto-asset service providers (CASPs) must ensure that their employees possess a certain level of qualification and experience. 

The guidelines draw on principles from MiFID II, the regulatory framework for traditional financial markets, while also accounting for the unique risks associated with crypto-assets, such as high volatility, security risks, and decentralized finance (DeFi) complexities.

ESMA’s draft guidelines introduce several minimum competency requirements for individuals providing crypto-related services. 

Staff who give advice or information on crypto-assets will be required to have professional qualifications related to financial services or blockchain technology, along with minimum industry experience, before engaging with clients. They must also undergo ongoing training and professional development to stay updated with market trends and regulatory changes.

Crypto-asset service providers will be required to conduct internal assessments to verify the competency of their employees and submit records of staff qualifications to national regulators upon request. 

This aligns with the EU’s strict regulatory approach toward the crypto industry, particularly in light of concerns about consumer protection and financial stability. 

Retail investors have increasingly turned to crypto-assets, with many entering the market through mobile apps and decentralized platforms. However, ESMA noted that knowledge gaps among investors remain significant, increasing the risk of financial losses.

By raising the professional standards for crypto service providers, regulators aim to enhance transparency and reduce misinformation in the industry. Some industry stakeholders, however, argue that excessive regulations could limit innovation and increase compliance costs for smaller crypto firms.

ESMA will review the public feedback and publish a final report by Q3 2025. Once finalized, the guidelines will serve as a benchmark for national regulators across the EU to assess the competence of crypto service providers.