EU Floats ESMA Takeover of Crypto Exchange Oversight
Sofia Laurent
November 4, 2025
“One supervisor, one playbook—that’s what institutions have been asking for,” said Elise Romero, regulatory strategist at Panopticon Partners.
Proposal at a Glance
The European Commission is exploring legislation that would give the European Securities and Markets Authority sweeping oversight over major trading venues, including crypto exchanges. A draft expected in December could hand ESMA powers similar to the U.S. SEC, letting it license platforms, monitor surveillance, and coordinate enforcement across the bloc.
Sources familiar with the process say the plan follows months of feedback from member states frustrated with uneven enforcement under MiCA. ESMA’s mandate currently revolves around harmonizing standards, but national regulators remain in the driver’s seat. The new proposal would invert that hierarchy for systemically important venues.
Why Brussels Wants Centralization
EU officials argue a single supervisor could slash compliance friction and prevent regulatory arbitrage. Banks and asset managers lobbying for clearer rules say they want the same rulebook whether they trade in Paris or Lisbon. A central ESMA regime could also speed approvals for products like the spot ETFs that U.S. markets rolled out this quarter.
Critics warn that concentrating authority risks creating bottlenecks and overloading ESMA’s resources. Smaller member states may resist ceding power, arguing that local nuances matter when policing offshore exchanges targeting domestic users.
Industry Reaction
Exchange operators privately acknowledge the benefits of a single supervisor, provided ESMA offers predictable licensing timelines. Several executives told CryptoMist they would accept tougher data-sharing obligations in exchange for guaranteed passporting rights across the bloc.
Others worry about duplicated reporting, especially if ESMA’s requirements diverge from national AML directives. The debate echoes concerns raised when infrastructure stress tests exposed operational gaps earlier this year.
How It Fits with MiCA
MiCA already lays out licensing standards for crypto-asset service providers, but leaves supervision to national authorities. ESMA today issues technical standards and coordinates colleges of regulators. The new plan would let ESMA approve or revoke licenses directly for exchanges deemed systemically important, while national agencies would handle routine inspections.
Legal experts note the Commission will need to clarify how ESMA’s authority interfaces with anti-money-laundering agencies and existing financial market directives. Absent clarity, firms fear conflicting instructions could slow down product launches and capital formation.
Timeline and Watchpoints
Brussels aims to circulate a draft by mid-December, kicking off negotiations with Parliament and member states in early 2026. Market participants are bracing for a multi-quarter process, but insiders say the Commission wants to finalize the framework before the next EU elections.
Key watchpoints include how ESMA defines “systemic” exchanges, whether derivatives venues fall within scope, and if transition periods give incumbents time to adapt. For now, firms are preparing comment letters while mapping potential overlap with U.K. reforms.