ESMA Consultation on Crypto-Assets Knowledge Assessment

The European Securities and Markets Authority (ESMA) has published a consultation paper seeking comments on a proposed knowledge assessment for individuals providing advice or information on crypto-assets on behalf of crypto-asset service providers (CASPs). This initiative is part of the technical standards being developed under the Markets in Crypto-Assets (MiCA) regulations.

Extending Knowledge Requirements

ESMA aims to extend the knowledge requirements under MiCA beyond advisers to also include information providers at CASPs. This is deemed necessary to ensure CASPs act in the best interests of their clients. Additionally, staff not directly interacting with clients must retain knowledge if responsible for “parameters and settings” of automated services.

Proposed Assessment Based on MIFID II

The proposed assessment by ESMA aligns with current practices, modeling its requirements for CASPs on the MIFID II regulatory guidelines for staff advising on investment products. The essential knowledge is categorized into 11 areas, including:
– Key characteristics and risks of crypto-assets
– Tax implications
– Fees and costs
– Sources of volatility
– Differences between MIFID II and MiCA protections

The paper suggests that new hires should undergo 80 hours of qualifying training plus six months of supervised work, or one year of supervised experience. Existing staff with over a year of experience must demonstrate their competence.

Continuous Knowledge Maintenance

ESMA further proposed minimum hiring requirements, including at least three years of tertiary education. Knowledge should be tested annually and subject to ongoing professional development.

Comments on the consultation paper will be accepted until April 25. The new guidelines are set to take effect 60 days after official publication.

MiCA regulations regarding stablecoins have been in effect since June 30. In January, ESMA stated that national regulators should ensure enforcement of the European stablecoin policy by the end of the first quarter of 2025. The agency also released a briefing on MiCA implementation best practices, summarizing its technical instructions for national regulators adopting MiCA.