Malta’s crypto regulator has confirmed that all local licenses issued under the EU’s Markets in Crypto-Assets Regulation (MiCA) remain secure following a recent peer review by European Union authorities.
“There is no risk of revocation or re-evaluation of any MiCA license in Malta due to the peer review findings,” a spokesperson for the Malta Financial Services Authority (MFSA) told Cointelegraph. The regulator added that it has already begun addressing the issues highlighted in the review.
The clarification follows a report released Thursday by the European Securities and Markets Authority (ESMA), the EU’s main oversight body for MiCA compliance, which identified certain authorization shortcomings in Malta’s regulatory framework.
Despite some community concerns, the MFSA emphasized Malta’s continued commitment to close cooperation with EU institutions and its active leadership in shaping crypto regulation.
Malta is a leading trailblazer in crypto regulation within the EU
A spokesperson for the MFSA noted that the ESMA report acknowledged the authority as a highly effective supervisor.
“This comes as no surprise, given that Malta has been at the forefront of crypto regulation since 2018,” the spokesperson said.
“Overall, the review reflects positively on Malta. Many tend to overlook the fact that Malta was already fully regulating crypto asset service providers (CASPs) long before MiCA was even on the table,” said Nathan Catania, partner at XReg Consulting.
Since enacting three crypto-related bills in 2018, the Maltese government has established itself as a pioneer in crypto regulation across Europe.
“Malta is the first country to adopt a comprehensive regulatory framework for distributed ledger technology (DLT) and crypto assets, addressing both the technological and financial services aspects,” the MFSA stated in July 2018.
Malta plans to implement the guidance by September 2025
In its review, ESMA issued several recommendations to the MFSA and other National Competent Authorities (NCAs) across the EU to strengthen supervision under MiCA.
The EU regulator emphasized the importance of timely evaluating CASPs’ growth strategies, carefully monitoring conflicts of interest in multi-service CASPs, and assessing risks arising from exposure to decentralized finance (DeFi) and unregulated services.
“We believe this review will boost confidence among those considering licensing in Malta, as well as among our peers regarding our cross-border supervision framework,” MFSA CEO Kenneth Farrugia said in an official statement responding to the review.
The agency also stated that it aims to fully implement the report’s recommendations by September.
ESMA underscores implications for National Competent Authorities (NCAs)
While the latest peer review focused on Malta, ESMA stressed that its assessment targets all National Competent Authorities (NCAs) across the EU.
“ESMA aimed to evaluate the MFSA’s approach to authorizing and supervising the firm, rather than examining the operations of the specific firm itself,” an ESMA spokesperson told Cointelegraph, adding:
“In the future, ESMA will continue using the peer review tool when it is appropriate, including in relation to other jurisdictions and topics.”
The regulator also emphasized that the peer review contains recommendations to be taken into account in ongoing supervision as well as in the authorization of future procedures.
Malta’s crypto regulation has long faced skepticism
While ESMA’s peer review of Malta’s crypto oversight was largely viewed as positive, the country’s approach to crypto supervision has faced considerable skepticism.
Malta has consistently aimed to establish itself as a “blockchain island,” mandating crypto platforms to obtain a financial services license starting in 2018. However, in 2020, 70% of initial applicants were denied licenses, leading many to believe that the regulatory requirements were overly strict.
In 2021, a unit within Malta’s Chamber of Commerce rejected claims that the country had failed to provide adequate regulatory oversight of cryptocurrency businesses.
In 2022, The Times of Malta reported that the collapsed crypto exchange FTX had two Malta-registered firms; however, the MFSA clarified that neither was licensed to offer services.
Some investigations criticized Malta’s “fast-and-loose” approach to attracting crypto companies, noting that by 2023, 85% of crypto businesses registered in Malta had left the island after the two-year transition period.
