ESMA calls for MiCA overhaul to regulate DeFi and enable asset freezes
CIE News ·
ESMA urged the European Commission to expand MiCA to cover DeFi, staking, and lending, while requesting emergency asset freeze powers to halt illicit crypto activity.
The European Securities and Markets Authority submitted a policy response to the European Commission on September 30, 2026, recommending significant revisions to the Markets in Crypto-Assets framework. According to europa.eu, the regulator advocated for extending rules to cover decentralized finance, liquid staking, lending, and borrowing. The proposals also include creating a newly regulated service category for firms offering access to DeFi protocols, establishing criteria for true decentralization, and setting binding rules on token classification.
To strengthen supervisory enforcement across the EU, ESMA sought emergency powers to order the immediate freezing of assets linked to suspected market abuse or money laundering, according to globalbankingandfinance.com. The authority cited existing administrative delays that often allow funds to disappear before intervention can occur. The submission also called for explicit powers to take down fraudulent websites, block unauthorized non-EU exchanges, and tighten rules on crypto promotions.
In addition to stricter oversight, ESMA recommended streamlining current procedures to reduce duplicative authorization burdens for regulated firms and simplify white-paper notifications. The regulator also emphasized developing a framework for tokenized securities and on-chain settlement to support European tokenized capital markets.