Fighting Market Abuse In Crypto-Assets: ESMA Guidelines Under MiCA

Published on April 29, 2025, the ESMA final report (ESMA75-453128700-1408) outlines the guidelines (Guidelines) for competent national authorities (NCAs) to prevent and detect market abuse in the context of the Markets in Crypto Assets Regulation (2023/1114) ("MiCA"). This document is part of the effort to ensure consistent and effective supervision of crypto-assets markets across the European Union.

Regulatory Context: MiCA and the Fight Against Market Abuse

MiCA requires crypto market participants, particularly PPAETs (Persons Professionally Involved in the Organization or Execution of Transactions), to have effective systems in place to prevent market abuse (Article 92).

This same article empowers ESMA to:

• Develop Regulatory Technical Standards (RTS) to structure surveillance and reporting tools (e.g., STOR template),
• Issue guidelines on best supervisory practices, which is the subject of this report.

Key Objectives of the Guidelines

ESMA aims to achieve several objectives:

• Ensure harmonized application of Title VI of MiCA (Articles 86 to 92),
• Strengthening the integrity of crypto markets by limiting manipulation or misuse of inside information risks,
• Provide a practical toolkit to guide NCAs in their supervisory approach.

Proposed Guiding Principles

The Guidelines propose the following key principles:

• Proportionality: Guidelines should be applied based on the importance of the crypto sector in each Member State.
• Risk-based Approach: Resources should be prioritized where manipulation risks are highest.
• Adaptation to Crypto Sector Specificities:
  
  • Role of social media as a vector for influence and spread of misinformation,
  • Blockchain-specific practices such as MEV (Maximal Extractable Value) or front-running,
  • Cross-border nature of crypto markets.

12 Structuring Guidelines

The Guidelines (detailed in Annex III of the report) are structured around 12 practical axes, including:

1. Proportionality (Guideline 1): NCAs should adjust their actions based on the market's exposure to manipulation risks (e.g., local crypto influencers, popular tokens).
2. General Approach (Guideline 2): Proactive monitoring of new or emerging threats, responsiveness, anticipation.
3. Integration into Existing Practices (Guideline 3): Leverage tools from MAR, adapted to crypto, such as MEV surveillance and social media monitoring.
4. Common Supervisory Culture (Guideline 4): Share experiences among NCAs, escalate concrete cases to ESMA, and pool tools.
5. Human Resources and Training (Guideline 5): Encourage the formation of specialized teams, use of specific crypto-surveillance tools, and joining European initiatives like EU-SDFA.
6. Stakeholder Dialogue (Guideline 6): Engage with experts, researchers, technical providers, platforms, etc., to refine understanding of risks.
7. Market Awareness (Guideline 7): Educational actions for actors (Q&A, training, concrete examples), in addition to legal obligations.
8. Data-driven Surveillance (Guideline 8): Use of public and private data, on-chain/off-chain analysis, and artificial intelligence to detect weak signals.
9. Supervision of PPAETs (Guideline 9): Continuous monitoring of their market abuse detection systems.
10. Handling STORs (Guideline 10): Set up efficient internal procedures to classify, analyze, and respond to reports received.
11. ESMA Coordination (Guideline 11): Use ESMA for coordinating cross-border investigations in case of jurisdictional conflicts or redundant efforts.
12. Third-Party Obstacles (Guideline 12): Identify barriers related to third countries (lack of cooperation, divergent regulations) and coordinate responses.

Stakeholder Dialogue: SMSG Contribution

The Securities and Markets Stakeholder Group (SMSG) was consulted and has:

• Expressed overall support for the project,
• Recommended strengthening links with consumer protection authorities and ensuring harmonization between Member States,
• Emphasized the need to invest in supervisor training.

ESMA has incorporated some of these suggestions, notably:

• Expanding the supervisory culture to non-financial authorities,
• Emphasizing continuous training,
• Encouraging the allocation of specific resources for monitoring crypto markets.

Implementation and Next Steps

The guidelines will be translated into all official EU languages.

Each authority will need to notify ESMA within two months if they intend to comply.
In case of non-compliance, a justification must be published.

How the Firm Can Assist

Our firm is well-equipped to assist in navigating the regulatory landscape set out by MiCA and the ESMA guidelines. With extensive experience in crypto-assets regulation, we can provide tailored advice and practical solutions to ensure compliance. We offer support on developing surveillance systems for market abuse detection, advice on best practices for NCAs and PPAETs, and help build training programs for supervisory teams. Furthermore, our team is adept at coordinating cross-border efforts, making us an ideal partner for crypto-market participants and authorities alike.

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.