COREDO Reviews EU Council’s ESMA Supervision Plan for Major CASPs

-REDPRESSWIRE- COREDO, a Prague-based legal and financial consulting firm, has reviewed the Council of the European Union’s negotiating position on transferring oversight of the most significant cross-border crypto-asset service providers to ESMA. The proposed two-tier model could impact licensed firms and applicants as

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PRAGUE, CZ — November 2, 2026 — COREDO, a Prague-based legal and financial consulting firm specializing in EU financial licensing, has reviewed the Council of the European Union’s negotiating position, agreed on October 9, 2026, regarding the proposed market integration and supervision package. This package would transfer oversight of the most significant cross-border crypto-asset service providers (CASPs) from national authorities to the European Securities and Markets Authority (ESMA). According to COREDO, the proposed two-tier model could impact both licensed firms and applicants, as future growth and the selection of a home Member State may now determine which authority supervises a crypto business.

The European Commission introduced the package on December 4, 2025, as part of the Savings and Investments Union. The proposal amends the ESMA Regulation and MiCA, and in its original form, would have placed all CASPs under ESMA supervision. After nine months of negotiations, Member States limited the scope. The Council press release of 9 October 2026 states that only the most significant cross-border CASPs, as well as significant central counterparties, central securities depositories, and trading venues, would be supervised by ESMA. Other CASPs would remain under national competent authorities.

Article 85 of MiCA already defines a significant CASP as one averaging at least 15 million active users in the Union over a calendar year, but it does not assign direct ESMA supervision. The current debate extends to additional criteria. In April 2026, the European Central Bank suggested including trading volumes, the value of crypto-assets held in custody, cross-border activity, and systemic relevance. The Council’s compromise appears to restrict direct ESMA supervision to the most significant cross-border providers, though the exact criteria are pending confirmation. Reuters cited officials estimating that 10 to 15 out of approximately 360 providers might be subject to the new supervisory tier.

The Council supports a two-year transitional period for the new framework. During this time, joint teams from ESMA and national authorities would transfer files, data, and supervisory expertise. ESMA would receive a full-time executive board—comprising a chair and five independent members—while the Board of Supervisors, made up of national authorities, would remain the main decision-making body. The Council’s agreement does not alter the current MiCA framework: national authorities will retain their supervisory responsibilities until the proposed legislation is adopted and relevant provisions become applicable.

European Commissioner Maria Luís Albuquerque informed ministers that the Commission regretted the compromise and could not support the narrower approach.

MiCA permits a CASP authorized in one Member State to serve clients across the Union without establishing a presence in each country. Concerns about inconsistent authorization standards intensified after a July 2025 ESMA peer review of an authorization by the Malta Financial Services Authority revealed gaps in governance, conflicts of interest, custody, and anti-money laundering risk assessments. Malta has opposed transferring supervision to ESMA.

“For most crypto firms in Central Europe, the national supervisor will remain the main counterpart; that is where the day-to-day supervisory relationship is built,” said Nikita Veremeev, Founder and Non-Executive Director of COREDO. “For firms planning substantial cross-border expansion, user numbers, custody assets and transaction volumes may become important determinants of future supervisory arrangements. Providers should therefore follow the emerging criteria closely and assess whether their projected growth could eventually bring them under direct ESMA supervision.”

Drawing on its experience in licensing and supervisory work, the crypto licensing advisors at COREDO have identified four practical considerations for authorized firms and applicants:

1. Growth modelling: Compare projected active users, custody assets, and transaction volumes over the next three years with the likely significance criteria.

2. Home-state choice: Assess jurisdictions based on supervisory depth and predictability rather than speed of authorization, as peer reviews and possible ESMA oversight reduce the value of a lenient entry point.

3. Portable supervisory file: Maintain authorization documents, policies, and operational evidence in a format reviewable by a second supervisor, including English versions of key documents.

4. Regulatory monitoring: Track the European Parliament’s position, trilogue negotiations, and the separate Commission review of MiCA.

The Council must formally adopt its position, and the European Parliament must agree its own before trilogue negotiations can begin. Given the legislative timetable and the proposed two-year transition, COREDO expects direct ESMA supervision of crypto firms to begin no earlier than 2029.

About COREDO

COREDO is a legal and financial consulting firm founded in 2016 and headquartered in Prague, Czech Republic. The company provides legal, compliance, financial licensing, and corporate services, assisting small and medium-sized enterprises in obtaining electronic money, payment, investment, and crypto-asset licenses, building AML frameworks, and structuring operations across 15 European jurisdictions.

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