Crypto Regulation EU Gets Stronger Enforcement Powers

Regulators in Brussels and Paris are pushing for sharper enforcement tools to combat cryptocurrency crime. On Wednesday, September 30, 2026, the message was delivered clearly: the existing EU-wide regulatory framework is too sluggish to prevent bad actors from transferring funds before authorities can freeze them. According to reporting from Paris by Reuters, the European Securities and Markets Authority (ESMA) stated that European regulators should receive expanded powers to enforce crypto rules, which would include the authority to command companies to freeze assets suspected of ties to criminal activity.

Key takeaways

• ESMA is seeking the authority to order crypto businesses to freeze assets whenever there are reasonable grounds to suspect connections to financial crime, money laundering, or terrorist financing.
• National regulators could receive the power to take down websites associated with scams or unauthorized cryptocurrency firms.
• ESMA argues that current asset-freezing procedures are too slow, allowing suspicious funds to vanish before action is implemented.
• The watchdog also advocates for a prohibition on misleading cryptocurrency marketing alongside new regulations for third-party promotions.
• These recommendations were submitted as ESMA’s formal response to the European Commission’s consultation regarding the review of the Markets in Crypto Assets Regulation (MiCA).

ESMA Calls for Enhanced Enforcement Powers

ESMA’s fundamental argument is that regulators cannot successfully police digital asset crime without the ability to move quickly to lock down suspicious funds. On Wednesday, the authority emphasized that both EU-level and national watchdogs require stronger legal mechanisms to address financial crime, money laundering, and terrorist financing linked to cryptocurrencies.

Proposals for Freezing Crime-Linked Crypto Assets

Under this initiative, ESMA would gain the capacity to direct cryptocurrency firms to freeze assets whenever there are “reasonable grounds to suspect” a connection to illegal behavior. This threshold is significant because it reduces the requirement from proven wrongdoing to reasonable suspicion, thereby providing enforcement agencies with the flexibility to act proactively.