The European Securities and Markets Authority (ESMA) has introduced a robust set of guidelines aimed at ensuring that employees at crypto-asset service providers possess the necessary knowledge and competence to perform their roles effectively. This initiative signals a crucial advancement in the professionalization of the crypto sector, aligning with the Markets in Crypto-Assets (MiCA) regulation.
The recently released consultation paper outlines minimum qualifications and obligatory ongoing professional development for staff who offer advice or information related to crypto-assets. As awareness and participation in crypto markets increase among retail investors, it has become essential to ensure that those providing services have a strong grasp of the complex landscape.
Under the proposed standards, individuals offering crypto advice must complete at least 20 hours of professional development each year, while those merely supplying information must complete 10 hours. Furthermore, specific educational backgrounds and experience will be mandated for advisors, who will need at least a three-year degree plus one year of supervised experience, or comparable combinations of education and practical experience.
The guidelines draw a clear distinction between staff roles, increasing the educational requirements for those in advisory positions, thus emphasizing the importance of expertise in the sector. Staff will need a comprehensive understanding of crucial concepts related to crypto assets, including:
– The fundamentals of distributed ledger technology
– Market operations and pricing dynamics
– Cybersecurity risks and protective measures
– The implications of regulations and investor protections
– Tax consequences and cost structures associated with crypto activities
In addition, crypto service providers will be responsible for evaluating employee competencies on an annual basis and keeping meticulous records for regulatory purposes. Inexperienced staff lacking the required qualifications can only operate under supervision for a maximum of four years.
The consultation will remain open until April 22, 2025, with final guidelines anticipated for release in the third quarter of 2025. The new rules will take effect two months after their publication in all official languages of the EU.
This development may pose challenges for smaller crypto service entities as they strive to comply with these heightened training and supervisory standards. However, larger organizations might view the outcome positively, seeing it as a progression toward a more mature and stable market environment.
These guidelines complement the MiCA framework, which has provided a structured set of regulations for crypto-asset services since its enactment in December 2024. Earlier in January 2025, stricter regulations addressing potential conflicts of interest for crypto companies were introduced. Such regulations represent a shift in operational practices, possibly necessitating firms to establish separate legal entities for services that could conflict with one another.
These reforms also focus on improved monitoring of internal transactions and broaden the definition of compensation, further establishing a more accountable ecosystem for crypto service providers.
Overall, the introduction of these guidelines reflects a growing recognition of the need for professionalism within the crypto industry as it continues to evolve and attract new participants. Enhanced staff competence is pivotal in fostering a more secure and knowledgeable environment as retail investors engage with crypto markets.