ESMA publishes draft guidelines: new knowledge and competence standards for the crypto sector

ESMA publishes draft Competency Guidelines for the EU cryptoasset sector

The European Securities and Markets Authority (ESMA) has launched a public consultation on new guidelines for assessing the knowledge and competence of persons providing information and advice on cryptoassets. This is part of the implementation of the Cryptocurrency Markets Regulation (MiCA), which is effective from 30 December 2024. The document sets out the minimum requirements for staff in the sector and how to verify their competence.

New obligations for crypto providers

The MiCA requires cryptoasset service providers (CASPs) to ensure that their staff have sufficient knowledge and skills to provide sound information and investment advice to clients. To this end, ESMA has drafted guidelines that set out criteria for assessing competence and how to develop it.

According to ESMA’s proposals, the minimum requirements for staff will vary depending on their role.

Those solely involved in providing information on cryptoassets should have a minimum of 80 hours of training and six months of experience working in the supervised sector. Crypto advisors, on the other hand, should meet higher requirements, such as a university degree (or equivalent education) and a minimum of one year of industry experience.

Guidelines include new training rules

An important element of ESMA’s proposal is the obligation for cryptoasset service providers to provide regular professional training to their staff. Staff members responsible for providing information on the cryptoasset market will have to undergo at least 10 hours of training per year, while investment advisors will have to undergo a minimum of 20 hours.

The aim of these measures is to keep knowledge up to date in the rapidly growing crypto-asset sector, which is characterised by high volatility and unique risks such as cyber attacks and market manipulation.

The guidelines also highlight the need to adapt the level of knowledge to the nature of the services provided. Advisers should have a better understanding of the mechanics of the cryptoasset market, risk management principles, tax implications and regulatory obligations under MiCA.

The guidelines also point out the need to take into account the differences between the MiCA regulation and the existing rules on traditional financial instruments (MiFID II) to provide clarity to investors on the level of protection of their funds.

Harmonisation of regulations across the European Union

One of the key objectives of the new guidelines is to harmonise standards across the EU. Currently, the level of regulation of the cryptocurrency market varies from one Member State to another, leading to an uneven playing field and a lack of uniform investor protection mechanisms.

With the new regulations, ESMA wants to ensure that all customers of cryptocurrency services can count on the same level of professionalism and service transparency.

The regulator also points out the potential costs of implementing the new guidelines, but stresses that these are a direct result of the MiCA regulations and are necessary to ensure an adequate level of customer protection.

Public consultation until 22 April 2025

ESMA is inviting all stakeholders – crypto-related service providers, investors, industry organisations and financial entities – to submit comments as part of a public consultation. The deadline for submitting positions is 22 April 2025 and the final guidelines are expected to be published in Q3 2025.

The new rules will have a significant impact on the future of the crypto market in the European Union, introducing higher standards and increasing investor security.

Do you need support in implementing ESMA guidelines? Contact our law firm and we will advise you on how to adjust the training structure, verify staff qualifications and implement appropriate procedures.