EU Watchdog Flags Malta’s Fast-Track Crypto Licensing Process

The European Securities and Markets Authority (ESMA) has raised concerns over Malta's expedited approval of a crypto asset service provider (CASP), marking the first major test of the EU's Markets in Crypto-Assets Regulation (MiCA). The review highlights unresolved governance, anti-money laundering, and technology risks at the unnamed firm.

Malta's Financial Services Authority (MFSA) granted licensure despite outstanding remediation issues from prior enforcement cases. ESMA identified conflicts of interest, inadequate AML safeguards, and unresolved technical vulnerabilities in digital security and Web3 integrations.

While acknowledging Malta's sufficient regulatory resources, the findings underscore growing scrutiny of crypto licensing standards under MiCA's new regime. The regulation, fully effective since December 2024, aims to harmonize oversight across EU member states.