Malta’s Fast-Track Crypto Licensing Draws Criticism From EU Financial Watchdog

Malta's crypto licensing process has come under fire from the European Securities and Markets Authority (ESMA). A peer review found the country's approach only "partially" met regulatory expectations under the new Markets in Crypto-Assets (MiCA) framework. Since January, Malta has granted five crypto asset service provider licenses under the EU's comprehensive regulations.

ESMA's review highlighted significant shortcomings in Malta's process, including insufficient risk assessment and failure to properly evaluate companies' supervisory histories. The scrutiny follows earlier reports that regulators were concerned about the speed of licensing in some member states. While ESMA didn't name specific firms, the examination focused on one particular crypto company's license approval.

The findings expose broader challenges in the EU's regulatory landscape. With MiCA now in effect as the world's first comprehensive crypto rulebook, inconsistencies between national regulators could undermine oversight of cross-border crypto firms. The passporting system, which allows licenses from one member state to serve across the EU, faces its first major test.