ESMA, the European Securities and Markets Authority, is expressing concerns regarding the potential emergence of new forms of market manipulation under the European Union’s recent crypto legislation, known as the Markets in Crypto-Assets (MiCA) framework. As the authority responsible for setting regulatory rules within the EU, ESMA specifically highlights the risks associated with market manipulation in the absence of a central counterparty.
MiCA aims to bring cryptocurrency activities within the regulatory framework of the EU, providing a clear set of rules and requirements for issuers, service providers, and exchanges operating in the crypto market. However, without a central counterparty to oversee and mitigate risks, ESMA worries that manipulating the market through various means, like the spread of false information or manipulative trading strategies, could become increasingly prevalent. This raises concerns about the stability and integrity of the crypto market and the protection of investors in the absence of strong regulatory oversight.
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