On Wednesday, September 30, 2026, the European Securities and Markets Authority (ESMA) called for a series of changes to the European Union’s Markets in Crypto-Assets Regulation (MiCA), saying the rules should be simplified while giving investors stronger protection and covering newer business models such as decentralized finance (DeFi), staking, lending and borrowing.
The recommendations were submitted in response to the European Commission’s public consultation on the review of MiCA.
ESMA said investors face risks that the current framework does not fully address, and it urged stricter rules on how crypto-assets are marketed, particularly when they are promoted by influencers and other third parties.
ESMA also pushed for greater transparency on costs and for proportionate requirements on staking, lending and borrowing, including disclosure obligations. Under the proposals, investors would be told about costs, risks, rewards, collateral arrangements and potential losses before making a decision.
To tackle unauthorised services, online fraud and non-compliant stablecoins, ESMA called for the EU to strengthen its ability to detect, block and deactivate fraudulent websites. It also wants authorities to be able to freeze crypto assets where market abuse or terrorist financing is suspected. The regulator further asked for reinforced powers to act against third-country firms that solicit EU investors without MiCA authorisation, as well as explicit rules barring regulated crypto firms from offering services linked to stablecoins that fail to meet MiCA requirements. ESMA said the changes would allow faster and more consistent supervisory action across the bloc and limit opportunities for regulatory arbitrage.
With DeFi and stablecoin activity growing, ESMA recommended clearer criteria for deciding which activities can be considered genuinely decentralized. It also proposed a new regulated crypto-asset service for firms that give users access to DeFi protocols.
On classification, the authority suggested adopting rules on how crypto-assets should be categorised, including newer products such as hybrid tokens. It asked to be given the power to issue binding opinions on token classification so that identical products are treated the same way across the EU market.
In line with the EU’s drive to reduce regulatory burdens, ESMA proposed streamlining parts of the existing rules. Its suggestions include simplifying white-paper notification procedures, cutting duplicative authorisation requirements for some regulated firms and improving the consistency of prudential requirements.
Looking beyond the MiCA review, ESMA also pointed to the need for a framework covering tokenized securities and on-chain settlement. It said such a framework would support an integrated European tokenised capital market and make cross-border activity easier in the future.
Source: ESMA
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