ESMA introduces new requirements for knowledge and competence of staff in the field of crypto assets

The European Securities and Markets Authority (ESMA) has proposed guidelines for assessing the knowledge and competence of employees of service providers related to crypto-assets. This initiative is part of broader cryptocurrency market regulation in the EU.

Consultation document and its purpose

In the consultation document published on February 17, ESMA addresses stakeholders with a proposal to develop standards for assessing the knowledge of those who provide advice or information on crypto-assets on behalf of service providers in this field.

These recommendations align with the European Union’s "Markets in Crypto-Assets" (MiCA) Regulation, which came into effect in June 2023. The primary goal is to establish uniform standards for personnel advising clients, enhance investor protection, and strengthen trust in the cryptocurrency market.

Key knowledge and qualification requirements

According to the proposed principles, employees must:

• understand the key characteristics and risks of crypto-assets;
• be familiar with market functioning principles and pricing mechanisms;
• have knowledge of blockchain technology;
• understand the regulatory framework and tax implications.

Special attention should be given to providing information on the risks associated with crypto-assets due to their high complexity and volatility.

Qualification proposals

ESMA proposes introducing minimum qualification requirements for personnel, including:

• prior experience in crypto-assets or financial services;
• continuous professional development;
• relevant degree or certification.

Service providers should annually review training needs, monitor unqualified employees, maintain records of their qualifications, and regularly assess their knowledge levels.