ESMA Guidelines for CASPs

With the Markets in Crypto-Assets Regulation (MiCA), the European Union has established a uniform regulatory framework for crypto-assets since its introduction.

While public discussion of crypto-assets is often dominated by price fluctuations, market volatility, or specific regulatory issues, the recently published ESMA guidelines on the knowledge and competencies of employees at Crypto Asset Service Providers (CASPs) show that regulation has now reached a new stage of development.

The guidelines are more than just another compliance requirement. They offer interesting insights into the maturity of the European crypto market while also raising new questions.

The market is more mature than its reputation suggests

In public debate, crypto assets are still frequently described as a young, experimental market segment. The ESMA guidelines, however, paint a different picture.

Instead of discussing fundamental questions about the legitimacy of crypto assets, the regulator is focusing on very specific requirements for employees who advise clients or provide information on crypto assets. The required knowledge ranges from distributed ledger technologies, tokenomics, and consensus mechanisms to market structures and valuation methods, as well as cyber risks, market abuse, anti-money laundering and investor protection.

The level of detail is particularly noteworthy. For example, employees should be able to understand and explain the effects of social media-driven market movements, how different blockchain protocols work, and the significance of network fees.

From Innovation to Professionalisation

With these guidelines, ESMA is pursuing a clear goal: to raise the quality of client information and advice to a uniform standard across Europe.

For employees who provide information on crypto-assets, ESMA is specifying concrete training and experience requirements for the first time. These include, for example, at least 80 hours of specialised continuing education or equivalent practical experience.

As a result, the crypto sector is moving closer, from a regulatory perspective, to the standards established in other areas of the financial industry for years.

This development is fundamentally positive. Uniform requirements build trust, strengthen investor protection, and, in the long term, facilitate the integration of digital assets into existing financial markets.

At the same time, many companies face a significant need for organisational adaptation. That is because MiCA requires not only appropriate processes and governance structures, but also increasingly focuses on the people who implement these processes day to day.

The Grandfathering Dilemma

As sensible as the guidelines seem overall, they leave important questions unanswered in some areas. That becomes particularly clear in the case of the so-called grandfathering provisions.

ESMA explicitly acknowledges that many professionals have been successfully active in the crypto market for years. Their expertise was often acquired not through formal education or certification, but through practical experience in a market that has evolved faster than the corresponding educational and training programs.

For this reason, the guidelines stipulate that employees who have already successfully performed relevant activities for at least one year before the guidelines’ effective date may, in principle, be considered sufficiently qualified.

The crucial question, however, remains unanswered: How exactly should this experience be demonstrated?

The guidelines thus describe who is generally eligible for the transitional arrangement. However, they do not clearly define what evidence national supervisory authorities will accept. Are job descriptions, employment references, or proof of work experience sufficient? Will specific project responsibilities need to be documented? What requirements apply to international professional experience or activities in unregulated market environments?

That creates uncertainty for companies currently applying for MiCA licenses or adapting their organisational structures. The regulatory direction is clear. However, the practical implementation remains open in key areas.

Knowledge Becomes Regulatorily Verifiable

The most important message of the ESMA guidelines, however, lies elsewhere. MiCA makes knowledge a resource relevant to regulatory oversight. While expertise in the crypto sector has often been demonstrated through practical experience, technological familiarity, and market knowledge, the regulation will require structured and documentable competency development going forward. Knowledge thus shifts from being an individual competitive advantage to a regulatory requirement. That becomes particularly clear in the requirements for continuous professional development (CPD). ESMA makes it clear that qualification cannot be a one-time demonstration. Knowledge must be regularly updated, reviewed, and documented.

For CASPs, this represents a fundamental shift. The challenge in the future will not only be finding suitable employees. Companies must establish processes for systematically building, further developing and documenting knowledge in a way that is verifiable to regulatory authorities.

Executive Education Becomes a Strategic Factor

This development also has implications for continuing education in the field of digital assets. The demand for high-quality educational offerings will increase significantly in the coming years. There is a need for programs that combine regulatory requirements, technological developments, and practical use cases. MiCA does not require a purely academic approach to crypto-assets. What is required is a sound understanding of how crypto markets function and how regulatory requirements can be implemented in practice.

Against this backdrop, Frankfurt School of Finance & Management is currently developing a comprehensive portfolio of continuing education and professional development programs focused on MiCA and digital assets.

Conclusion

The new ESMA guidelines send a strong signal to the market. They demonstrate that crypto-assets are no longer a marginal issue from a regulatory perspective in Europe.

At the same time, the guidelines make it clear that the path to full regulatory clarity is not yet complete. Market participants and supervisory authorities will need further guidance in the coming months, particularly regarding the practical implementation of grandfathering. The Digital Assets & Blockchain Expert certificate programme offers you the opportunity to expand your in-depth expertise in a targeted manner.