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) demonstrate that the regulatory landscape has now reached a new stage of development.

The guidelines are much more than just another compliance requirement. Not only do they provide an interesting insight into the maturity of the European crypto market, they also raise new questions.

The market is moving beyond its reputation

In public discourse, the crypto asset market is still often described as young and experimental. However, the ESMA guidelines paint a different picture.

Rather than addressing fundamental questions about the legitimacy of crypto assets, the regulator is focusing on specific requirements for employees advising clients or providing information on crypto assets. This includes knowledge of distributed ledger technologies, tokenomics, consensus mechanisms, market structures, valuation methods, cyber risks, market abuse, anti-money laundering and investor protection.

The level of detail is particularly noteworthy. Employees, for example, should be able to understand and explain the impact of social media-driven market movements, how different blockchain protocols work and why network fees are significant.

From innovation to professionalisation

ESMA has a clear objective in issuing these guidelines: to raise the quality of client information and advisory services to a uniform standard across Europe.

ESMA has set out specific training and experience requirements for the first time for employees who provide information on crypto assets. These include at least 80 hours of specialist training or equivalent practical experience.

From a regulatory perspective, this means that the crypto sector is moving closer to the standards established in other areas of the financial industry years ago.

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

At the same time, many companies need to adapt their organisational structures significantly. This is because MiCA does not merely require appropriate processes and governance structures; the regulation is also increasingly focusing on the people who implement these processes on a day-to-day basis.

The grandfathering dilemma

However sensible the guidelines may seem overall, they do leave some important questions unanswered in certain areas.

This is particularly evident in the case of the so-called “grandfathering” provisions.

ESMA expressly recognises that many professionals have already been operating in the crypto market successfully for years. In a lot of cases, their expertise has not been acquired through formal training programmes or certification, but through practical experience in a market that has developed more rapidly than the relevant education and training programmes.

The guidelines therefore stipulate that employees who have successfully carried out relevant duties for at least one year before the guidelines came into force are generally considered to be sufficiently qualified.

However, the crucial question remains unanswered: how exactly is this experience to be demonstrated?

The guidelines therefore set out who may, in principle, be covered by the transitional arrangements. However, they do not clearly define what evidence national supervisory authorities will accept. Will job descriptions, employment references or records of work experience be sufficient? Will specific project responsibilities need to be documented? What requirements apply to international work experience or work carried out in unregulated market environments?

This creates a degree of uncertainty for companies that are currently applying for MiCA licences or adapting their organisational structures. The regulatory direction is clear. However, key aspects of the practical implementation remain unresolved.

Knowledge becomes verifiable from a regulatory perspective

Perhaps the most important message of the ESMA guidelines lies elsewhere.

MiCA makes knowledge a resource of regulatory significance.

While expertise in the crypto sector has traditionally been demonstrated through practical experience, technological familiarity and market knowledge, the new regulation will require structured, documentable competence development in future. As such, knowledge shifts from being an individual competitive advantage to a regulatory requirement.

This is particularly evident in the requirements relating to continuous professional development (CPD). ESMA makes it clear that qualifications should not be a one-time certification. Knowledge must be regularly updated, assessed and documented.

For CASPs, this represents a fundamental change. In future, it will no longer be enough to simply find suitable employees. Instead, companies must establish processes through which knowledge can be systematically built up, developed and documented in a transparent manner for supervisory authorities.

Executive education will become a strategic factor

This development also has implications for further training in the field of digital assets.

Demand for high-quality education programmes is set to rise significantly in the coming years. Programmes that combine regulatory requirements, technological developments and practical applications are needed. MiCA does not require a purely academic approach to crypto assets. Instead, a sound understanding of how crypto markets function and how regulatory requirements can be implemented in practice is needed.

With this in mind, the Frankfurt School is currently developing a comprehensive portfolio of continuous education and professional development programmes with a focus on MiCA and digital assets.

Conclusion

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

At the same time, the guidelines make it clear that the path to full regulatory clarity is not yet complete. In the coming months, market participants and supervisory authorities will require further guidance, particularly with regard to the practical implementation of “grandfathering”. The Digital Assets & Blockchain Expert certificate programme enables you to develop in-depth specialist knowledge in a targeted manner.