EU Crypto Regulation: ESMA Urges Stronger Enforcement Powers

European Union watchdogs may soon receive broader authority regarding cryptocurrency oversight. On Wednesday, September 30, 2026, the European Securities and Markets Authority (ESMA) stated that both national regulators and ESMA require expanded powers to implement the bloc’s crypto framework. The agency argued that existing mechanisms operate too slowly to halt scams, unauthorized trading, and money laundering before harm occurs. According to a Reuters report from Paris, this recommendation arrives at a crucial time as Brussels evaluates the Markets in Crypto Assets Regulation (MiCA).

Key Takeaways

• ESMA is seeking the authority to direct crypto businesses to freeze assets believed to be connected with terrorism financing, money laundering, or criminal acts.
• National watchdogs could receive the power to remove websites associated with fraudulent schemes or unlicensed crypto entities.
• ESMA advocates for prohibiting deceptive crypto advertising strategies and establishing guidelines for third-party promotions.
• Regulators at the national level would obtain targeted authorities to address non-EU digital asset firms unlawfully targeting EU investors.
• Digital asset businesses might face mandates to provide complete cost details to their clients.

These recommendations represent ESMA’s input into the broader evaluation of MiCA currently underway.

ESMA Calls for Expanded Regulatory Powers in EU Crypto Market

ESMA’s primary argument is that the effectiveness of EU crypto rules depends entirely on the enforcement mechanisms available to regulators, which currently remain inadequate. The authority emphasized that European watchdogs need enhanced capabilities to properly execute crypto regulations, presenting this appeal as a necessary reaction to vulnerabilities identified since MiCA took effect.

Authority to Freeze Crime-Linked Crypto Assets

The recommendation suggests that ESMA should possess the direct ability to instruct digital asset firms to freeze funds whenever reasonable suspicion links them to unlawful behavior. This push for urgency stems from existing limitations in the regulatory framework.