Europe’s next crypto dispute is about who enforces the rules, not whether there should be rules. The European Commission has proposed giving the Paris-based European Securities and Markets Authority (ESMA) direct supervision of the bloc’s largest crypto-asset service providers (CASPs), shifting frontline oversight away from national regulators to a single EU-level authority.
France, Austria and Italy say centralized supervision is overdue. In a joint September 2025 paper their market authorities argued that a stronger European framework would reduce wide differences in how member states authorize firms and curb regulatory shopping by cross-border crypto businesses.
Malta’s Financial Services Authority (MFSA) strongly disagrees. The MFSA told Cointelegraph that it would be “premature to introduce structural changes” such as centralization while the Markets in Crypto-Assets Regulation (MiCA) has only recently become fully applicable and its market effects are still being assessed. Under MiCA, firms can obtain authorization in one member state and passport services across the EU, so the choice of supervisor affects market integration, investor protection and the role of national regulators.
Observers framed the dispute as a small state resisting the Commission’s reach, but Maltese practitioners say the objections are structural and practical, not merely parochial. Ian Gauci of Maltese law firm GTG, who helped draft Malta’s early crypto rules, argues Malta’s stance is about timing, effectiveness and preserving the conditions that made Europe attractive to crypto business.
What ESMA already does and what is proposed
ESMA already leads work on supervisory convergence and runs peer reviews of national authorities. A fast-track ESMA review of one Maltese CASP authorization—widely reported to be OKX—found Malta met supervisory expectations but suggested the firm’s authorization “should have been more thorough.” Supporters of centralization say a single supervisor for major cross-border firms would deliver more harmonized oversight, stronger investor protection and less forum shopping.
Malta and some industry voices accept there are inconsistencies between member states, but they warn that centralizing supervision risks replacing close, experienced national oversight with more distant supervision. Gauci says a stronger EU role may be justified for genuinely systemic, cross-border firms, but cautions against a blanket transfer of powers that would apply to too many firms.
OKX, the firm at the center of the review, rejects the suggestion it sought out a smaller supervisor to gain advantage. Erald Ghoos, OKX’s European CEO, told Cointelegraph that OKX has been supervised by Malta under a high-standard regime since 2021 and that its MiCA authorization reflects a longstanding regulatory relationship rather than a rushed process. With MiCA still bedding in, he argued, there is no clear evidence the current model is failing and centralization risks becoming a political decision rather than a technocratic fix.
Alternatives to full centralization
Gauci and other Maltese critics argue that regulators should use existing tools more forcefully before reallocating MiCA’s powers: make peer reviews meaningful, set strict timelines for corrective action and attach clear consequences for persistent shortcomings. Those steps would target uneven supervision while keeping accountability local.
Their deeper concern is structural: large crypto firms often operate as integrated systems across jurisdictions, yet the draft approach would split oversight between ESMA, national authorities and the European Anti-Money Laundering Authority (AMLA). At the same time, the Digital Operational Resilience Act (DORA) pushes for an integrated view of IT and operational risk. Fragmenting supervisory responsibilities could complicate decision-making and accountability in a crisis.
A trade-off between depth and scale
The debate highlights a broader trade-off. Early-mover national jurisdictions developed proximity and specialist expertise by supervising fast-moving crypto firms closely. Moving responsibility quickly to a centralized supervisor could erode that depth, discourage investment in local supervisory capacity and unintentionally push firms to relocate outside the EU—the opposite of policymakers’ goals.
Proponents of centralization emphasize harmonization and stronger investor protection; opponents emphasize timing, proportionality and preserving the supervisory capabilities that attracted crypto businesses in the first place. The outcome will shape how the EU balances unified rules with national experience as MiCA settles in.
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