Malta Commits to Crypto Fixes as EU Raises Concerns

- Malta remains dedicated to strengthening its role as an EU crypto regulation leader. - The MFSA vows to address gaps identified in the recent ESMA peer review. Malta has reaffirmed its commitment to European crypto regulation leadership despite findings from a European Securities and Markets Authority (ESMA) peer review exposing deficiencies in its Markets in Crypto-Assets (MiCA) license procedures. The Malta Financial Services Authority (MFSA) stated that no current MiCA licenses are at risk and detailed plans to address these issues by September 2025. On July 11, 2025, *Cointelegraph* reported that the ESMA peer review, initiated in April 2025, scrutinized the MFSA’s authorization and initial oversight of a specific crypto-asset service provider (CASP). Published on July 10, the review acknowledged the MFSA’s expertise and resources but noted shortcomings in the licensing process. Unresolved issues cited include gaps in overseeing the provider’s growth strategies, managing conflicts of interest for multi-service providers, and assessing risks tied to decentralized finance (DeFi) exposure. The report outlined key recommendations for national regulators, such as speeding up CASP evaluations, enhancing oversight of multi-service providers, and proactively monitoring DeFi risks. In response, the MFSA pledged to adopt all of ESMA’s recommendations by September 2025. Kenneth Farrugia, CEO of the MFSA, stated that Malta’s enhancements would bolster confidence among firms pursuing MiCA licenses in the country. An MFSA spokesperson also highlighted the ESMA report’s acknowledgment of Malta as a “highly effective supervisor” and credited its early 2018 adoption of crypto regulation for cementing its leadership in the EU. Nevertheless, the ESMA review has reignited skepticism about Malta’s aspirations as a “Blockchain Island.” Previous concerns include high rejection rates for initial license applications and scrutiny over FTX-linked entities formerly registered in Malta. Critics argue that Malta’s relatively lenient approach to MiCA licensing could undermine its credibility as a rigorous regulatory hub. MiCA, implemented across the EU on December 30, 2024, provides a unified framework enabling firms to operate throughout EU member states with a single license. Malta’s prior regulatory framework, introduced in 2018, closely parallels MiCA standards, reinforcing its appeal to crypto-focused enterprises. As of July 13, 2025, 12:00 UTC, Bitcoin (BTC) is trading at $31,504, reflecting a 1.6% increase over the past 24 hours, according to CoinMarketCap. Ethereum (ETH), meanwhile, is trading at $1,978, marking a 0.4% decrease within the same timeframe.