Readers familiar with the accelerated regulatory tempo that has characterised the European crypto-asset landscape since the adoption of the Markets in Crypto-Assets Regulation ("MiCA") will have noticed that, on 26 March 2025, the European Securities and Markets Authority ("ESMA") supplemented the primary legislation with a 35-page set of Guidelines on the assessment of suitability and on the format of the periodic statement for portfolio-management activities, thereby translating the broad principles embedded in Article 81 MiCA into granular, auditable expectations that every crypto-asset service provider ("CASP") operating—or passporting—into the European Economic Area must now embed in its operating model.
While the document is framed as soft law, its practical impact should not be underestimated: ESMA expressly instructs national supervisors to incorporate the text into their supervisory frameworks within sixty calendar days of the official-language publication.
- A re-imagined suitability regime—far beyond checkbox compliance
At the heart of the Guidelines lies an insistence that suitability is not a one-off onboarding ritual but an iterative process that continuously reconciles three moving targets—client knowledge & experience, financial situation and investment objectives—with an equally dynamic product universe. ESMA therefore compels CASPs to:
- Inform clients, in plain yet complete language, that the assessment is a statutory obligation resting on the provider, not on the investor, and that incomplete data will force the firm to refrain from recommending or executing transactions.
- Capture information with sufficient granularity to reflect the complexity of the product set offered, meaning that firms pitching leveraged or illiquid tokens must dig deeper than those restricting their catalogue to plain-vanilla Bitcoin spot exposure.
- Validate answers instead of relying on client self-assessment, for example by embedding consistency checks into digital questionnaires and by cross-referencing declared experience with actual trading records.
- Refresh client profiles at intervals aligned with risk and life-cycle events, with a hard back-stop at two years, thereby preventing stale data from silently eroding the robustness of the initial assessment.
Crucially, ESMA reminds the industry that every portfolio action—buy, hold, sell, or even an explicit recommendation to do nothing—must pass the suitability test. For CASPs that rely on model portfolios or algorithmic allocation engines, this means that the underlying code, its change-management log and the testing evidence become supervisory artefacts in their own right.
- Product governance meets crypto-specific risk
Beyond client-side analytics, the Guidelines demand a symmetrical effort on the asset-side: CASPs are expected to operate robust classification, risk-scoring and equivalence-mapping processes that capture idiosyncratic exposures—from oracle-manipulation to consensus-mechanism vulnerabilities—and to compare products on cost, complexity and liquidity before inclusion in advice or managed portfolios. Where two solutions serve an identical economic purpose, the cheaper and simpler must prevail unless the provider can document a client-centred rationale for choosing otherwise. For institutions accustomed to MiFID-II product-governance workflows in the traditional-securities arena, the message is clear: replicate the process rigour, but enrich the taxonomy with DLT-native risk factors.
- Turning data into dialogue—the upgraded periodic statement
Complementing the ex-ante suitability discipline, ESMA prescribes a high-resolution periodic statement that goes well beyond a generic valuation snapshot. The statement must be delivered on a durable medium (or an online system that qualifies as such), automatically notify the client when new data are posted, and, as a minimum, disclose portfolio composition, period performance—including staking rewards—fee aggregates, benchmark comparison and a narrative explaining how trading activity (or inactivity) served the client's objectives. For providers operating cross-border, the ability to offer multilingual, metrics-rich dashboards could become a branding differentiator vis-à-vis competitors who merely attach PDF ledgers.
- Human capital as a supervisory focal point
Echoing another MiCA-driven consultation on knowledge & competence, the Guidelines reaffirm that all personnel materially involved in suitability—front-office advisers, product quants and even the engineers configuring robo-advice algorithms—must possess demonstrable crypto-specific expertise. Firms that relied on generic financial-instrument certifications will therefore need to recalibrate their HR and continuing-professional-development budgets if they wish to preserve business-model optionality once the NCAs begin to sample staff files.
- Why early compliance is a strategic imperative, not a cost centre
Delay, in regulatory matters, rarely translates into neutral outcomes. Because suitability data feed directly into onboarding conversion rates, cross-sell algorithms and, ultimately, risk capital models, a proactive migration to ESMA-grade processes enables CASPs to:
- Accelerate licensing and passporting by pre-empting NCA information requests that would otherwise stall MiCA applications.
- Enhance investor confidence through evidence-based product recommendations and transparent reporting, crucial when courting institutional allocators with fiduciary duties.
- Reduce operational risk by embedding data quality checks that also deter fraud and enforce sanctions screening.
- Differentiate on user experience, leveraging interactive statements and real-time suitability alerts as value-adds rather than regulatory overhead.
Bergt Law, positioned at the intersection of Liechtenstein's agile legislative environment and the broader EEA framework, has already distilled the 35-page ESMA text into an actionable implementation kit that combines legal interpretation, process engineering and NCA liaison. Whether you require a gap analysis, a bespoke questionnaire that balances psychometrics with blockchain literacy, or a white-label statement template compliant with Article 81(14), our multidisciplinary team stands ready to turn compliance into competitive advantage.
Sources:
- ESMA Guidelines On certain aspects of the suitability requirements and format of the periodic statement for portfolio management activities under the Markets in Crypto Assets Regulation (MiCA), 26 March 2025, ESMA35-1872330276-2031
Key findings & core statements
- ESMA's Guidelines convert Article 81 MiCA into enforceable detail, with a 60-day transposition window for national regulators.
- Suitability moves from "tick-box" to continuous monitoring, demanding validated data, periodic refreshes and algorithm governance.
- Product assessment must incorporate crypto-native risks and justify any preference for costlier or more complex instruments.
- Periodic statements evolve into investor dashboards, detailing composition, fees, benchmarks and goal alignment.
- Staff across the value chain need verifiable crypto-asset competence, extending training obligations beyond client-facing roles.
- Early movers can capitalise on faster passporting, superior client trust and streamlined risk management—gains that outweigh the upfront project spend.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
