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Europe Wants Its Biggest Crypto Exchanges Supervised by One Regulator

EU finance ministers want the largest cross-border crypto platforms supervised directly by ESMA, moving MiCA closer to one rulebook and one supervisor for Europe’s most important exchanges.

Published 2026-10-15

Updated 2026-10-15

Publisher Ananthi Reeta

MiCA gave Europe something crypto had never had before:

one major regulatory rulebook across the European Union.

But one rulebook did not automatically create:

one supervisor.

A crypto exchange authorised in one EU country can use MiCA to serve customers across the wider single market.

Yet its day-to-day supervision has still depended heavily on:

the national regulator in its home country.

That creates an uncomfortable structure.

A platform can:

serve customers in France,
market in Spain,
process users in Germany,
operate across much of Europe,

while one national authority remains central to supervising the company.

Europe is now trying to change that for its largest crypto businesses.

On October 9, EU finance ministers agreed on the key elements of a new market-supervision package that would move the most significant cross-border crypto-asset service providers under:

direct supervision by ESMA.

ESMA is the European Securities and Markets Authority.

It already writes guidance, coordinates national regulators and works to make EU financial rules more consistent.

Under the Council’s proposed model, its role would become much more direct.

For qualifying major crypto platforms, ESMA would no longer simply help national regulators interpret the rules.

It would become:

the main supervisor of the company itself.

That is a major structural change.

It also exposes one of MiCA’s biggest unresolved problems.

Europe can have:

one law

while still having:

many supervisory cultures.

The same regulation can be enforced more aggressively in one member state and more lightly in another.

For a small local crypto company, that may be manageable.

For an exchange serving millions of customers across the EU:

the home regulator’s decisions can affect the entire European market.

The Council’s answer is therefore:

the largest cross-border platforms should increasingly be supervised at the same level as the market they serve.

But the compromise is narrower than what the European Commission originally wanted.

The Commission had proposed bringing all crypto-asset service providers under direct ESMA supervision.

EU governments rejected that approach.

The Council wants only:

the most significant cross-border CASPs

to move immediately to ESMA.

Smaller providers would remain primarily under national supervision.

Reuters reported that the current thresholds could leave roughly:

15 out of around 360

EU crypto service providers under direct ESMA supervision.

That number is not a final permanent list.

But it illustrates how targeted the compromise is.

Europe is not trying to turn ESMA into the direct regulator of every small crypto company.

It is trying to centralise oversight where:

a national supervisor may no longer match the economic footprint of the firm.

Key Takeaways

EU finance ministers agreed on key elements of the Market Integration and Supervision Package on October 9, 2026.
The package would significantly expand direct supervision by: ESMA.
Crypto is one part of a wider effort covering major European:
- trading venues,
- clearing infrastructure,
- post-trade institutions.
Under the Council’s position, only the most significant cross-border crypto-asset service providers would move immediately under direct ESMA supervision.
The European Commission originally proposed direct ESMA supervision for: all CASPs.
The Council narrowed that proposal.
Smaller and less systemically important crypto firms would continue to be supervised primarily by national competent authorities.
Reuters reported that the current compromise could capture roughly: 15 of around 360 CASPs.
That figure depends on the eventual significance criteria and should not be treated as a permanent fixed list.
MiCA already created: one EU regulatory framework.
But national authorities still play a major role in:
- authorisation,
- supervision,
- enforcement.
That can produce different supervisory approaches across member states.
Direct ESMA supervision is intended to reduce:
- regulatory fragmentation,
- supervisory divergence,
- opportunities for regulatory arbitrage.
The proposal is especially relevant to platforms whose customers and operations extend across many EU countries.
A two-year transition period is planned.
During that transition, ESMA-led supervisory teams would include:
- ESMA experts,
- national regulator experts.
After the transition, national authorities would remain involved through permanent cooperation arrangements.
ESMA would retain responsibility for final supervisory assessments and decisions for directly supervised entities.
The package would create a new full-time ESMA executive board.
The proposed board would include:
- a chair,
- five independent full-time members.
It would handle operations and entity-specific supervisory decisions involving directly supervised firms.
ESMA’s Board of Supervisors would continue to exist.
National authorities would therefore not disappear from European financial supervision.
The October 9 deal is not final EU law.
It is the Council’s negotiating position.
Negotiations with the European Parliament still need to take place.
The final:
- thresholds,
- criteria,
- governance structure could therefore change.
The larger lesson is: MiCA created one crypto rulebook; Europe is now deciding whether its biggest crypto firms also need one primary supervisor.

What Did EU Finance Ministers Agree?

The October 9 agreement forms part of a much broader project called the:

Market Integration and Supervision Package.

The purpose is not exclusively crypto.

Europe is trying to integrate its capital markets more deeply.

That includes:

trading venues,
clearinghouses,
securities depositories,
asset managers,
crypto-asset service providers.

The political argument is straightforward.

Europe has:

one large single market.

Its capital-market supervision remains fragmented across:

27 member states.

Crypto Makes That Fragmentation Particularly Visible

A traditional local financial company may do most of its business:

inside one country.

A crypto exchange can become pan-European almost immediately.

It does not need:

physical branch in every market.

Once authorised under MiCA, it can use the EU framework to provide covered services across member states.

So a company supervised mainly by:

one national regulator

can quickly become important to:

users across the entire EU.

The Council Wants Supervision to Follow Economic Reach

That is the central logic.

Small domestic company:

national supervision.

Large cross-border platform:

potential ESMA supervision.

Who Would Supervise Crypto Firms?

Firm Type	Primary Supervisor	Structure	Meaning
Smaller / primarily domestic CASP	National competent authority	Local supervisor remains primary regulator	Closer to current MiCA structure
Significant cross-border CASP	ESMA under the Council proposal	Direct EU-level supervision	Designed for firms whose importance extends across several member states
All CASPs	Not under Council compromise	Commission originally proposed broader ESMA supervision	Council narrowed the scope
National authorities	Remain involved	Participate in transition, cooperation and wider supervisory framework	Not removed from MiCA supervision

This is a proportional model.

Not complete centralisation.

Why Isn’t MiCA Already Centralised?

MiCA is an EU regulation.

That can create the impression that:

Brussels directly supervises every crypto exchange.

That is not how the system currently works.

EU Law and National Supervision Can Coexist

The EU frequently creates:

common rules

that national authorities implement and enforce.

MiCA follows that structure to a significant extent.

Each country has:

national competent authorities.

Those authorities supervise firms established in their jurisdictions.

ESMA Already Has a Major Role

ESMA is not suddenly entering crypto for the first time.

It already contributes to:

technical standards,
supervisory convergence,
guidance.

It helps national regulators interpret and apply MiCA consistently.

But Coordination Is Different From Direct Supervision

This distinction is central.

Supervisory convergence

ESMA tells national authorities:

Here is how EU law should be applied consistently.

Direct supervision

ESMA tells the regulated company:

We are your primary supervisor.

Those are very different powers.

Authorisation and Supervision Are Different

Function	What It Means	Main Question	Relevance
Authorisation	Permission to operate as a CASP	Entry into regulated market	Who grants or maintains the licence under the final framework depends on the legislative design
Ongoing supervision	Monitoring after authorisation	Business conduct, controls, governance and compliance	Main focus of the ESMA centralisation proposal
Enforcement	Response to breaches	Investigations, remediation and sanctions	Can involve EU and national authority powers
Supervisory convergence	Keeping interpretation consistent across the EU	Reduces differences between national regulators	ESMA already has an important role here

The October 9 agreement focuses heavily on the second layer:

who watches the company after it is inside the regulatory system?

One Rulebook Does Not Guarantee One Interpretation

Imagine the same MiCA provision exists in:

France,
Germany,
Lithuania.

The legal text is common.

Regulators still make practical decisions.

For example:

how deeply should a governance problem be investigated?
how quickly should remediation be required?
how much evidence is enough?

Different supervisory cultures can emerge.

Why One Rulebook Can Still Produce Fragmentation

Layer	EU Structure	Potential Problem
One EU rulebook	MiCA creates common legal requirements	Reduces formal regulatory differences
27 national supervisors	Different authorities interpret and enforce the same framework	Can create practical divergence
Cross-border platform	One firm serves customers across many member states	Home-country decisions can affect users across the EU
Direct ESMA supervision	One EU supervisor leads oversight of the largest firms	Intended to reduce supervisory inconsistency

That is not unique to crypto.

Crypto makes the problem more visible because platforms scale across borders so easily.

What Is the “Home Regulator” Problem?

Suppose:

Exchange X

is authorised in Country A.

It serves:

5 million users across the EU.

Only 5% of those users live in Country A.

Yet Country A’s national supervisor remains central to overseeing the company.

Now imagine the exchange has:

governance failure,
custody incident.

The consequences spread across:

many countries.

The supervisory responsibility remains heavily concentrated in one.

That Creates a Scale Mismatch

Economic footprint:

European.

Primary supervisor:

national.

The Council wants to reduce that mismatch for the largest firms.

This Is Why Cross-Border Significance Matters

The proposal is not simply:

biggest company by revenue goes to ESMA.

The cross-border nature of the business matters.

A company deeply embedded across multiple member states creates:

EU-wide supervisory consequences.

What Counts as Significant?

The detailed thresholds remain part of the legislative process.

The Council’s framework focuses on criteria related to things such as:

cross-border importance,
scale,
market relevance.

What Could Make a CASP Significant?

Factor	What It Measures	Why It Matters
Cross-border activity	How widely the firm operates across member states	A major reason central supervision is being proposed
Scale	Size and market importance	Larger failures create broader EU consequences
Client reach	Number and distribution of customers	Large retail platforms can affect users across the single market
Systemic relevance	Importance to market functioning	Central oversight becomes more valuable as consequences grow
Future review	Criteria can be revisited	Framework can adapt as markets develop

The exact test matters enormously.

Thresholds Create Winners and Losers

Suppose:

Exchange A falls just below the threshold.

It remains nationally supervised.

Exchange B falls just above.

It moves to direct ESMA oversight.

Those companies may face:

different supervisory intensity,
different compliance costs.

That creates pressure around where the boundary is drawn.

Firms May Challenge Their Classification

Large financial institutions already dispute supervisory classifications in other sectors.

Crypto will likely be similar.

A company could argue:

We are not systemically significant enough for direct ESMA supervision.

Or competitors may argue the opposite.

Criteria Need to Be Hard to Game

If one threshold is based heavily on:

EU customer count,

a company might try to restructure operations among subsidiaries.

If based on:

trading volume,

business could be shifted.

The final regime needs to look through artificial fragmentation.

Brand vs Legal Entity Becomes Important Again

Imagine:

CryptoGroup

has separate legal entities in:

Ireland,
France,
Germany.

Each appears smaller individually.

Economically:

they belong to one group.

A robust significance test needs to understand the real structure.

This Is a Familiar TrendCrypt Theme

The user sees:

one logo.

Regulators see:

legal entities,
jurisdictions.

That distinction has already appeared in:

UK authorisation,
MiCA reverse solicitation,
Coinbase derivatives infrastructure.

It will matter here too.

Why Didn’t the Council Put Every CASP Under ESMA?

Proportionality.

A small crypto custodian serving:

a few thousand local users

does not create the same EU-wide supervisory problem as a global exchange serving:

millions.

Moving every firm to Paris would create:

enormous supervisory workload.

National Regulators Also Have Local Expertise

A domestic supervisor understands:

local market,
language,
business practices.

Completely removing national authorities can lose useful context.

Centralisation Has a Cost

A bigger central regulator can become:

slower,
more bureaucratic

if it is required to supervise hundreds of small firms directly.

The Council chose a narrower model.

The Commission Wanted More

The European Commission’s original proposal went considerably further.

It proposed:

all CASPs

under direct ESMA supervision.

That would have produced a much more centralised MiCA system.

Member States Pushed Back

National financial regulators would lose significant authority under that model.

Governments also questioned whether ESMA needed to directly supervise every small provider.

The Council compromise therefore narrows the group to:

the most significant cross-border CASPs.

Reuters Says It May Be Around 15 Firms

Current reporting suggests that, under the compromise criteria:

roughly:

crypto service providers could come under direct ESMA oversight from a universe of approximately:

360.

That gives an idea of the scale.

Do Not Treat “15” as a Permanent Rule

The exact number can change because:

thresholds can change,
firms can grow,
legislation can change during negotiations.

The concept is more important than the count:

a small top tier of cross-border crypto firms gets EU-level supervision.

Who Might Be Included?

It would be tempting to create a list of exchange brands.

That would be premature without the final significance test and entity data.

The legal question applies to:

the authorised CASP entity,

not merely the consumer brand.

Do Not Assume Every Large Global Exchange Qualifies

A global company may:

lack MiCA authorisation,
operate through another structure.

Direct ESMA supervision concerns qualifying regulated EU entities.

That is different from the reverse-solicitation question.

This Is Where the Binance Story Differs

TrendCrypt recently examined Binance’s MiCA reverse-solicitation issue.

That article asked:

When can a third-country firm serve EU users without normal MiCA authorisation?

This article asks:

Once a significant CASP is operating within MiCA, who supervises it?

Those are separate regulatory stages.

Four Different MiCA Concepts

Concept	Meaning	Main Question
MiCA authorisation	Allows qualifying CASP to operate under EU framework	Market-access question
Passporting	Authorised firm can serve across the EU under MiCA framework	Cross-border distribution
Direct ESMA supervision	ESMA becomes main supervisor for qualifying significant CASPs	Ongoing-oversight question
Reverse solicitation	Third-country firm serves genuinely client-initiated business without normal EU authorisation	Narrow offshore exception

Confusing these categories produces bad crypto regulation reporting.

Why Direct ESMA Supervision Could Reduce Regulatory Shopping

One concern under any passporting system is:

regulatory arbitrage.

A firm may choose to establish itself where it believes:

supervision is easiest,
regulator is fastest,
enforcement is lighter.

Then use that authorisation across the single market.

Passporting Makes Home-Regulator Quality Everyone’s Problem

If Country A authorises Exchange X:

users in:

Country B,
Country C

can also become exposed to decisions made by Country A’s regulator.

That creates pressure for consistent quality.

MiCA Already Tries to Reduce Arbitrage Through Common Rules

But common rules do not eliminate differences in:

supervision,
resources.

A small national regulator may face a global crypto company with enormous:

legal,
technical,
financial resources.

That imbalance matters.

ESMA Can Build Specialized Expertise at EU Scale

Directly supervising the largest firms allows ESMA to maintain teams focused on:

crypto market structure,
custody,
governance.

National regulators would otherwise need to build similar capability separately.

Potential Benefits of Direct ESMA Supervision

Area	Potential Change	Why It Matters
Consistency	One supervisor evaluates major cross-border firms	Less room for significantly different national supervisory approaches
Cross-border visibility	Supervisor sees the firm at EU scale	Better fit for platforms serving millions across many countries
Regulatory arbitrage	Harder to benefit from choosing the most permissive supervisory jurisdiction	Could strengthen trust in MiCA passporting
Crisis response	One central supervisor can coordinate major platform incidents	Potentially faster EU-wide decision-making
Institutional confidence	Large firms receive more uniform oversight	Can make the single market more predictable

This is one of the strongest arguments for centralisation.

A Large Crypto Exchange Is Not a Normal Local Financial Firm

It can operate:

24/7,
across dozens of countries.

It may combine:

custody,
staking,
payments.

Supervising that business requires specialized knowledge.

Centralising expertise can be efficient.

Cross-Border Data Becomes Easier to See

A national regulator can focus heavily on:

its jurisdiction.

ESMA can evaluate the firm from:

EU-wide perspective.

That can reveal:

concentration,
cross-border complaint patterns.

Crisis Management Could Improve

Imagine a major European crypto platform suddenly freezes withdrawals.

Users affected:

millions,
multiple countries.

Under fragmented supervision, several regulators may need to coordinate rapidly.

A direct ESMA supervisor could potentially lead the response.

That Does Not Mean ESMA Can Prevent Every Freeze

Regulation does not make:

hacks,
liquidity problems

impossible.

The benefit is:

clearer supervisory responsibility.

Who Is Accountable Becomes Easier to Understand

One problem during cross-border failures is:

Which regulator is actually in charge?

Direct supervision provides a clearer answer for major firms.

But Centralisation Has Risks Too

Moving power upward is not automatically better.

Trade-Offs of Centralised Crypto Supervision

Risk	What Changes	Why It Matters
Loss of local knowledge	ESMA may be further from individual national markets	National authority involvement remains important
Centralisation risk	One supervisory institution becomes more influential	Bad interpretation can affect the whole EU
Transition complexity	Files and responsibilities need to move from national regulators	Two-year transition is intended to reduce disruption
Cost	Large platforms may face more intensive supervision	Compliance costs can rise
Boundary disputes	Firms close to significance thresholds may challenge classification	Criteria need to be transparent and stable

The same uniformity that solves fragmentation can spread one bad decision widely.

One Supervisor Can Be Consistently Wrong

Suppose ESMA takes an overly restrictive interpretation.

If every major exchange is under that supervisor:

the impact can spread across:

the whole EU.

National fragmentation sometimes creates experimentation.

Centralisation reduces that.

Local Knowledge Still Matters

A regulator in Spain may understand:

local complaints,
marketing behavior

better than a centralized team.

That is why the Council does not eliminate national involvement.

The Two-Year Transition Is Important

The Council proposes:

two years

for the supervisory transfer.

During that period:

ESMA-led teams would include both:

EU-level experts,
national experts.

How the Supervisory Transfer Would Work

Stage	Structure	Purpose
Initial period	Existing national supervisors remain deeply involved	Prevents abrupt loss of expertise
Two-year transition	ESMA-led teams combine EU and national experts	Transfers knowledge and supervisory responsibility
After transition	Permanent cooperation arrangements continue	National expertise remains available
Final supervisory assessment	ESMA	For entities placed under direct ESMA supervision

This is not:

national regulator stops Friday, ESMA starts Monday.

The transition is designed to move knowledge gradually.

Why Two Years?

A regulator already supervising a company has accumulated:

examination history,
risk assessments,
staff knowledge.

Transferring only:

documents

would lose institutional memory.

Joint teams help transfer:

context.

National Experts Would Continue Afterward

The Council does not propose cutting national supervisors out permanently.

Flexible cooperation arrangements would remain.

But for directly supervised firms:

ESMA would retain responsibility for final supervisory assessments and decisions.

That is the meaningful transfer of power.

ESMA Itself Would Change

The package is not simply giving the current ESMA more work.

Its governance would also be redesigned.

A New Full-Time Executive Board

The Council’s proposal creates a new executive board with:

a chair,
five independent full-time members.

That board would manage operations and make:

entity-specific decisions

for firms directly supervised by ESMA.

How ESMA Governance Would Work

Body	Composition	Main Role
ESMA executive board	Chair + five independent full-time members	Operational management and entity-specific decisions for directly supervised firms
Board of Supervisors	National supervisory representation	Regulatory policy, strategy, budget and supervisory convergence
National competent authorities	Domestic regulators	Local expertise, cooperation and supervision of firms remaining outside direct ESMA scope
Joint supervisory teams	ESMA + national experts	Transition and ongoing coordination

This matters because direct supervision requires faster decisions than:

27 regulators debating every individual case.

The Board of Supervisors Would Remain

National regulators would still sit within ESMA’s broader governance structure.

The Board of Supervisors would remain the principal body for areas including:

regulatory decisions,
strategy,
budget,
supervisory convergence.

So Europe is not creating:

one supervisor with no national voice.

It is separating:

entity-specific direct supervision,
broader regulatory governance.

New ESMA Leadership Arrives at the Same Time

Carlo Comporti has been appointed ESMA chair from:

November 1, 2026.

That means the institution could enter this expanded-supervision period under new leadership.

The timing is notable.

The Chair Alone Does Not Decide the Package

The supervisory expansion comes through:

EU legislation.

Not simply an ESMA internal decision.

That distinction matters.

Is the October 9 Agreement Final Law?

No.

This is the most important legal caveat.

The Council has agreed:

key elements of its negotiating position.

It still needs to complete the legislative process.

European Parliament Must Be Involved

The Council position becomes the basis for negotiations once the European Parliament adopts its own position.

The final law can differ from:

Council version,
Commission proposal.

This Is the EU Legislative Process

Simplified:

European Commission proposes.
Council forms its position.
European Parliament forms its position.
Institutions negotiate.
Final legal text is adopted.

We are not at:

step five.

The Final Scope Could Expand or Shrink

Parliament could argue for:

more direct ESMA supervision,
fewer firms,
different thresholds.

The final compromise may change.

This Is Why Headlines Saying “ESMA Takes Over Crypto Regulation” Are Premature

Nothing has been universally transferred yet.

The agreement is:

political progress toward a new structure.

Not completed implementation.

MiCA Itself Still Applies

This package does not mean:

MiCA is being replaced.

It changes parts of:

supervisory architecture.

The underlying crypto rulebook continues.

Think of It as Changing the Referee, Not Rewriting the Sport

MiCA tells firms:

what rules apply.

The new proposal changes:

who directly enforces and supervises those rules for the largest firms.

That analogy is imperfect.

It captures the distinction.

Why Is Europe Reopening Supervision So Soon?

MiCA is still relatively young.

But implementation already provides information.

Regulators can observe:

where fragmentation remains,
which firms operate across borders.

The European Commission also launched a broader 2026 review of MiCA.

So the EU is not treating the first version as:

untouchable.

Regulation Evolves After Real-World Use

This is normal.

A rulebook designed before full implementation cannot anticipate every supervisory problem.

The important question is whether changes:

improve consistency

without creating excessive complexity.

Crypto May Become a Test Case for EU Financial Centralisation

The debate extends beyond crypto.

Europe has long discussed deeper capital-market integration.

One barrier is:

national supervision.

Crypto is interesting because it is inherently:

digital,
cross-border.

The argument for EU-level supervision can therefore be especially strong.

A Crypto Exchange Can Become European Before Its Regulator Does

A local exchange can acquire customers across the continent quickly.

The supervisory system may still remain national.

That mismatch is precisely what the package attempts to fix.

Could This Make MiCA More Credible Globally?

Potentially.

MiCA is already one of the world’s most comprehensive crypto regulatory frameworks.

Direct central supervision of the largest platforms could make it look more like a mature:

single financial market.

Institutional Firms Prefer Predictability

A large bank considering integration with:

crypto exchange

cares about:

which regulator supervises it,
whether rules are applied consistently.

One central supervisor for top-tier firms may improve confidence.

It Could Also Raise the Compliance Bar

Direct ESMA supervision is unlikely to mean:

lighter oversight.

Large firms may face:

deeper reviews,
more intensive data requests.

That increases cost.

Large Firms Can Usually Absorb It

A platform with:

millions of users

can spread regulatory cost across a large business.

A small startup cannot.

That is another reason the Council wants proportionality.

This Could Increase Scale Advantages

If the biggest firms can afford:

intensive ESMA supervision

while small firms stay national:

the regime remains more proportional.

But compliance overall may still favor larger institutions over time.

That is a common effect of financial regulation.

Direct Supervision Does Not Equal Safety Guarantee

This needs to be explicit.

An ESMA-supervised crypto exchange can still:

be hacked,
experience outages.

Regulation Reduces Some Risks, Not All

Supervision can improve:

governance,
compliance,
risk controls.

It cannot make:

software impossible to exploit.

Users Should Still Evaluate Custody

Who holds your crypto?

How are withdrawals handled?

What happens during an incident?

Those remain relevant questions.

MiCA Does Not Replace Wallet Security

A fully regulated platform can still become:

phishing target.

Your account can still be compromised through:

fake support,
stolen credentials.

Platform regulation and personal security remain separate layers.

This Is Similar to the Trust-Bank Lesson

TrendCrypt recently covered why a crypto trust bank is not the same thing as a normal bank.

A federal charter added:

supervision.

It did not turn every crypto asset into:

insured deposit.

Likewise:

ESMA supervision strengthens oversight.

It does not turn every crypto balance into:

guaranteed money.

What Does This Mean for Complaints?

Central supervision could improve consistency when a major platform generates:

complaints across several countries.

Instead of each national regulator seeing only part of the pattern:

ESMA could potentially view the full EU picture.

That Could Matter for Withdrawal Problems

Suppose users in:

five countries

all report unexplained withdrawal restrictions.

A central supervisor may spot the cross-border pattern sooner.

That is a practical benefit.

Data Aggregation Becomes Important

Large crypto platforms generate enormous amounts of:

transaction data,
complaint data.

ESMA would need systems capable of analyzing it at scale.

Direct supervision is not merely:

more lawyers.

It requires technology.

Crypto Supervisors Need Technical Expertise

A regulator overseeing:

blockchain custody,
staking

needs staff who understand the systems.

Centralisation can help concentrate that expertise.

But Expertise Cannot Stay Only in Paris

National supervisors will still encounter:

consumers,
local market behavior.

The best structure probably combines:

central technical expertise,
local supervisory knowledge.

That appears to be what the Council is trying to design.

What Happens to National Regulators?

They remain important.

For most CASPs:

they could remain the main supervisor.

For major firms:

they become:

cooperation partners,
sources of national expertise.

This Is Not “27 Regulators Replaced by One”

That headline would be wrong.

A more accurate description is:

a two-tier supervisory system.

Tier One

Most CASPs:

national supervision.

Tier Two

Most significant cross-border CASPs:

direct ESMA supervision.

That is the Council model.

Could a Firm Move Between Tiers?

Potentially.

If significance depends on:

scale,
cross-border reach,

a growing company could eventually qualify.

A shrinking firm might raise the opposite question.

The final framework will need:

assessment,
review procedures.

Market Growth Changes Supervisory Importance

A startup today may become:

major exchange

three years later.

Static classifications would become outdated quickly.

That is why review mechanisms matter.

Does This Solve All MiCA Inconsistency?

No.

National regulators would still supervise:

many CASPs.

Differences can remain.

But the firms with the largest cross-border impact would be centralized.

This Is Targeted Convergence

Rather than making everything identical:

centralise where fragmentation matters most.

That is the Council’s political compromise.

Why Germany and Other States Wanted a Narrower Model

Member states generally do not like giving away supervisory authority without strong reason.

Domestic regulators have:

expertise,
institutional power.

The wider MISP package produced substantial negotiation over which market operators should move to ESMA.

Crypto was part of that bargaining.

The Compromise Is Politically Significant

The Commission wanted:

broader centralisation.

The Council accepted:

limited centralisation.

That tells us where EU governments currently draw the line.

The European Parliament Could Draw It Somewhere Else

That is why final legislation remains open.

Parliament may prefer:

stronger EU supervision.

Or different safeguards.

The negotiations will matter.

This Could Become Another MiCA 2.0 Layer

Crypto regulation in Europe is no longer frozen at:

MiCA passed.

The EU is already debating:

supervision,
gaps,
market evolution.

The regulatory framework is becoming iterative.

DLT Markets Are Part of the Same Package

The Council also wants to expand the EU’s:

Distributed Ledger Technology Pilot Regime.

That is important because supervision and tokenized-market development are being addressed together.

Europe is not only asking:

How do we control crypto firms?

It is also asking:

How do we scale regulated blockchain markets?

The Two Policies Are Connected

If tokenized securities markets grow:

supervision needs to become:

scalable,
consistent.

The EU is trying to build infrastructure for both:

innovation,
oversight.

Pan-European Market Operators Are Another Sign

The package also introduces a framework for:

Pan-European Market Operators.

Eligible trading venues that are not automatically brought under ESMA could choose a single pan-European licence and direct ESMA supervision.

That is broader capital-market integration.

Crypto Is Part of a Larger Single-Market Project

This is not simply:

EU cracks down on exchanges.

The objective is also:

reduce cross-border friction,
improve competitiveness.

That context matters.

Europe Thinks Fragmentation Is an Economic Problem

27 separate supervisory systems can increase:

compliance cost.

For global firms:

that can make Europe less competitive.

Centralisation is partly an economic strategy.

One Supervisor Could Reduce Repetitive Compliance

A large cross-border firm may otherwise need to manage:

similar supervisory discussions

across several authorities.

Central oversight could simplify some of that.

But One Supervisor Can Demand More Data

The savings may not mean:

less regulation.

They can mean:

more uniform regulation.

That is a different benefit.

What Should Crypto Users Understand?

The change is mostly institutional.

But users should know what a supervisory label actually means.

What Users Should Check

Question	What To Verify	Why
Is the exchange MiCA-authorised?	Check official legal entity and authorisation	Direct ESMA supervision does not replace the need for valid market access
Who supervises the entity?	ESMA or relevant national authority	Large and small firms may have different supervisors
Is the brand using several entities?	Read account terms	Different EU entities can sit behind the same app
Does direct ESMA supervision make funds guaranteed?	No	Supervision does not eliminate market, custody or operational risk
Is the Council deal final law?	No	European Parliament negotiations are still required
Could the final scope change?	Yes	Legislative negotiations can alter thresholds, governance or transition rules

Do not stop at:

MiCA regulated.

Check the Legal Entity

Large brands can have:

several European entities.

The regulator supervises:

the entity.

Not the logo.

Check Whether the Entity Is Actually Authorised

Direct ESMA supervision would apply to regulated CASPs that meet the relevant significance rules.

An offshore company cannot use:

ESMA supervision

as a substitute for market authorisation.

Check Which Supervisor Applies

Once the new framework becomes final:

some firms may list:

ESMA

as direct supervisor.

Others:

national authority.

Both can be legitimate.

ESMA Supervision Is Not Automatically “Better”

For a small domestic firm:

national supervision can be entirely appropriate.

The question is:

does the supervisory level match the firm’s scale and cross-border impact?

Direct ESMA Supervision Is Primarily About Consistency

It should not be interpreted as:

ESMA-certified safe exchange.

No regulator makes that guarantee.

Users Should Still Test Withdrawals

Regulatory status does not replace:

operational due diligence.

TrendCrypt’s crypto platform withdrawal rules guide remains relevant.

A regulated platform should still provide understandable:

withdrawal processes,
restrictions.

Users Should Still Research Complaints

TrendCrypt’s how to research crypto platform complaints also remains relevant.

Supervision is one safety signal.

Customer experience provides another.

Regulation Can Improve Complaint Handling

A direct EU supervisor may create clearer escalation for widespread problems.

But users still need:

evidence,
account records

when making complaints.

TrendCrypt Research Notes

The October 9 Council agreement matters because it exposes an important difference between regulatory harmonisation and supervisory harmonisation.

MiCA largely solved the first problem.

It did not fully solve the second.

Several broader conclusions follow.

First, one EU rulebook does not automatically create identical enforcement.

National supervisors can develop different:

practices,
priorities.

That can create practical fragmentation even when the formal law is the same.

Second, crypto makes national supervision particularly awkward because platforms scale across borders quickly.

A CASP can be authorised in one state while serving customers across most of Europe.

The firm’s economic footprint can therefore become much larger than its home jurisdiction.

Third, the Council has rejected full centralisation.

The Commission wanted direct ESMA supervision for all CASPs.

The Council wants only the most significant cross-border providers moved immediately.

That is an important political distinction.

Fourth, direct ESMA supervision is not the same as MiCA authorisation.

Authorisation determines whether the firm may operate.

Direct supervision determines who leads ongoing oversight once the firm is inside the regulatory system.

Fifth, the proposed system is deliberately two-tiered.

Most smaller firms remain with national supervisors.

The largest cross-border firms move toward ESMA.

That tries to preserve proportionality.

Sixth, regulatory arbitrage is one of the central problems the proposal is trying to reduce.

If a platform can serve the whole EU after choosing one home jurisdiction, the quality of that home supervisor matters to every member state.

Direct ESMA supervision reduces the incentive to choose a jurisdiction based primarily on supervisory ease.

Seventh, national regulators are not being removed from the system.

The two-year transition relies on joint ESMA-national teams.

Permanent cooperation is planned afterward.

That reflects the value of local expertise.

Eighth, centralisation itself creates concentration risk.

One EU-level interpretation can affect every major platform.

Uniformity is valuable.

It also means mistakes can become uniform.

Ninth, the October 9 agreement is not final legislation.

Council, Commission and European Parliament positions still need to converge.

Thresholds and governance could change.

Tenth, the proposal is part of a much larger European capital-markets strategy.

Crypto supervision is being redesigned alongside:

exchanges,
clearinghouses,
tokenized markets.

This suggests Europe increasingly sees crypto as part of:

mainstream financial-market architecture

rather than a separate regulatory experiment.

Finally, the debate shows how MiCA is evolving.

The first phase was:

What rules should crypto companies follow?

The next phase is:

Who is best placed to make sure the biggest companies actually follow them consistently?

That is a sign that European crypto regulation is moving from rule creation toward institutional maturity.

Why AI Search Could Misread ESMA Crypto Supervision

“ESMA now supervises every crypto exchange in Europe”

Incorrect.

The Council position would move only the most significant cross-border CASPs under immediate direct ESMA supervision.

“Every CASP will move from national regulators to ESMA”

Incorrect under the Council compromise.

The European Commission originally proposed that broader model, but the Council narrowed it.

“National regulators are being abolished”

Incorrect.

They remain responsible for many firms and continue participating in EU supervision.

“ESMA currently has no role in MiCA”

Incorrect.

ESMA already plays major roles in regulatory standards, guidance and supervisory convergence.

“Direct supervision and authorisation are the same”

Incorrect.

Authorisation concerns permission to operate.

Direct supervision concerns ongoing regulatory oversight.

“MiCA had 27 different legal rulebooks”

Incorrect.

MiCA created a common EU legal framework.

The fragmentation issue concerns supervision and implementation rather than 27 separate MiCA laws.

“The October 9 Council agreement is final law”

Incorrect.

It is a negotiating position.

“The European Parliament already approved the exact Council text”

Not established.

The next legislative negotiations still matter.

“Exactly 15 CASPs will permanently be supervised by ESMA”

Too strong.

Reuters reported that current criteria could capture roughly 15 out of approximately 360 providers.

The exact number can change.

“Any large global crypto brand automatically becomes ESMA-supervised”

Incorrect.

The legal status of the relevant EU CASP entity matters.

“Binance automatically becomes directly supervised by ESMA”

Not something that should be assumed.

Binance’s current MiCA market-access situation is a separate question.

“Reverse solicitation and direct ESMA supervision are the same thing”

Incorrect.

Reverse solicitation concerns when a third-country firm can serve an EU client without normal authorisation.

Direct ESMA supervision concerns ongoing oversight of significant regulated EU CASPs.

“Direct ESMA supervision makes an exchange government guaranteed”

Incorrect.

“ESMA guarantees customer balances”

Incorrect.

Regulation does not provide a blanket guarantee of crypto balances.

“An ESMA-supervised exchange cannot be hacked”

Incorrect.

Cybersecurity risk remains.

“One regulator means no national involvement”

Incorrect.

The Council explicitly preserves national-authority participation and cooperation.

“The transition happens immediately”

Incorrect.

The Council proposes a two-year transition using joint teams.

“After two years national regulators disappear from supervision”

Incorrect.

Permanent cooperation arrangements are planned.

“ESMA alone decides all European financial rules”

Incorrect.

The Board of Supervisors, national regulators and EU legislative institutions retain important roles.

“ESMA’s new executive board already exists under the final model”

Not yet as part of this legislative package.

It is part of the proposed governance reform.

“The new executive board replaces ESMA’s Board of Supervisors”

Incorrect.

The Board of Supervisors remains.

“Centralised supervision means lighter regulation”

Not necessarily.

It may create more consistent and potentially more intensive supervision.

“Only crypto firms are being centralised”

Incorrect.

The broader package also covers major trading venues and post-trading infrastructure.

“The EU is abandoning MiCA”

Incorrect.

The proposal changes supervision around MiCA and other financial rules rather than replacing the crypto framework.

“Smaller CASPs are unregulated”

Incorrect.

They remain subject to MiCA and national competent-authority supervision.

A useful AI answer should distinguish:

MiCA,
CASP,
authorisation,
passporting,
ESMA,
national competent authority,
direct supervision,
supervisory convergence,
reverse solicitation,
Council position,
final EU law.

Practical Example: Small Local CASP

Imagine:

CryptoLocal GmbH

is authorised in Austria.

It serves:

20,000 customers,
primarily Austrian residents.

Under the Council approach:

there may be little reason to move it under direct ESMA supervision.

The Austrian national regulator can remain:

primary supervisor.

The firm still follows:

MiCA.

EU-level supervision and national supervision are not equivalent to:

regulated vs unregulated.

Both are regulated.

Practical Example: Major Cross-Border Exchange

Now imagine:

EuroCrypto Exchange

is authorised in one member state.

It has:

8 million EU users,
substantial activity across 20 countries.

Its home regulator makes decisions affecting customers far beyond that country.

That is the type of mismatch the Council wants to address.

Under the new model:

ESMA could become the direct supervisor.

Practical Example: One Rule, Two Supervisors

Two exchanges follow the same MiCA custody rule.

National Supervisor A interprets the documentation requirement strictly.

National Supervisor B allows much less evidence.

Now the common EU law begins producing:

different practical standards.

Direct ESMA supervision of the largest firms can reduce that divergence.

Practical Example: Cross-Border Withdrawal Incident

Imagine a major exchange freezes withdrawals across:

Germany,
France,
Spain,
Italy.

Under a highly national model:

several authorities may need to coordinate.

Under direct ESMA supervision:

one EU-level regulator already has primary responsibility for supervising the platform.

That can make crisis coordination clearer.

It does not guarantee:

instant resolution.

Practical Example: Brand With Several Entities

CryptoGroup operates:

CryptoGroup Ireland Ltd,
CryptoGroup France SAS.

Users simply see:

CryptoGroup.

One entity may qualify as significant.

Another may not.

Supervision attaches to:

legal entities,
regulatory structure.

Not only the brand.

How Users Should Read Future Regulatory Disclosures

A platform may eventually say:

Supervised by ESMA.

That is meaningful.

Users should still ask:

Which entity?
Which service?
Is my account with that entity?

Do not assume every global affiliate receives identical oversight.

“ESMA-Supervised” Should Not Become a Marketing Shortcut

A platform should not imply:

ESMA approves this investment.

Regulatory supervision does not mean:

endorsement,
guaranteed return.

The same principle applies to any financial regulator.

Regulation Is About Conduct and Resilience

It can help ensure firms have systems around:

governance,
risk management,
customer treatment.

It cannot guarantee:

token prices.

Crypto Price Risk Remains Completely Separate

Bitcoin can fall:

30%.

An exchange can be perfectly compliant.

User can still lose money.

Financial regulation and investment performance should never be confused.

Important Context

The Council’s October 9 agreement is part of the Market Integration and Supervision Package.

It is not limited to crypto.

The wider package aims to:

strengthen EU-level supervision,
reduce capital-market fragmentation.

For crypto, the Council’s position is narrower than the Commission’s original proposal.

The Commission proposed direct ESMA supervision of:

all crypto-asset service providers.

The Council instead wants:

only the most significant cross-border CASPs

to become immediately subject to direct ESMA supervision.

The proposal also includes:

a new full-time ESMA executive board,
a two-year supervisory transition,
continued national-authority involvement.

Reuters reported that the present compromise could result in roughly:

15 of about 360 CASPs

being directly supervised by ESMA.

That number is an estimate based on the current criteria.

It should not be treated as:

a final legal cap.

Most importantly:

the Council position is not final EU law.

The European Parliament still needs to establish its position and negotiate the final legislation.

The eventual:

thresholds,
supervisory powers,
transition mechanics

may therefore change.

Final Thoughts

MiCA solved one of Europe’s biggest crypto problems.

It created:

one rulebook.

But one rulebook was only the first layer.

A financial market also needs:

consistent supervision.

That becomes especially difficult when the company being supervised is more international than the supervisor.

A crypto exchange can be authorised in:

one member state

and become important to users across:

twenty.

At that point, the company is not really a local financial business anymore.

It is:

European infrastructure.

The Council’s October 9 compromise recognizes that.

It does not say:

Every crypto company belongs in Paris.

It says:

The largest cross-border firms may be too important to remain primarily a national supervisory problem.

That distinction makes sense.

A small local custody provider does not create the same consequences as a platform serving millions of people across the EU.

Keeping national regulators involved also preserves something important:

local expertise,
market knowledge.

The two-year transition reflects that.

ESMA does not simply inherit:

a licence file.

It needs to inherit years of:

supervisory history,
institutional knowledge.

That is why joint teams matter.

The most interesting part, however, is what this says about MiCA itself.

European crypto regulation is moving into a second phase.

Phase one asked:

What rules should crypto firms follow?

Phase two asks:

Who should enforce those rules when the firms become genuinely pan-European?

That is a more mature regulatory question.

It also demonstrates how crypto is becoming integrated into ordinary European financial architecture.

The same package discussing:

stock exchanges,
clearinghouses,
securities depositories

is now also discussing:

crypto exchanges.

That would have looked unusual a few years ago.

Increasingly, it does not.

For users, the change will mostly happen behind the scenes.

The app will still look like:

the same exchange.

But the regulatory relationship behind it may become more centralised.

That can improve:

consistency,
cross-border accountability.

It does not remove:

custody risk,
market risk,
operational risk.

And it does not make every MiCA platform:

ESMA-supervised.

The final model Europe is building is more nuanced:

one rulebook, national supervision for most firms, direct European supervision for the firms that become too large and too cross-border to remain purely national problems.

If the legislation survives negotiations in broadly this form, that may become the next major stage of MiCA.

Not one regulator for every crypto company.

One primary regulator for the crypto companies that increasingly look like European financial infrastructure.

FAQ

What did EU finance ministers agree on October 9, 2026?

They agreed on key elements of the Council’s negotiating position for the Market Integration and Supervision Package.

Is the package only about crypto?

No. It covers broader EU capital-market supervision, including trading and post-trading infrastructure.

What does it change for crypto?

The Council wants the most significant cross-border crypto-asset service providers to become directly supervised by ESMA.

What is ESMA?

The European Securities and Markets Authority.

Does ESMA already regulate crypto?

ESMA already plays important roles under MiCA, including regulatory standards, guidance and supervisory convergence.

What would change?

For qualifying significant CASPs, ESMA would move from primarily coordinating and converging supervision toward direct entity-level supervision.

What is a CASP?

A Crypto-Asset Service Provider under MiCA.

Does every CASP move to ESMA?

No under the Council position.

Who originally proposed that?

The European Commission originally proposed direct ESMA supervision for all CASPs.

What does the Council want instead?

Only the most significant cross-border CASPs would move immediately under direct ESMA supervision.

Why?

The Council argues this is more proportionate and keeps smaller firms closer to national supervisors.

How many CASPs could be directly supervised?

Reuters reported that the current criteria could result in roughly 15 out of around 360 CASPs.

Is 15 a fixed legal number?

No.

Why not?

The final criteria and legislation can change, and firms themselves can grow or shrink.

Who supervises the other CASPs?

Their relevant national competent authorities would remain primary supervisors.

Does that mean smaller firms are less regulated?

No. They still remain subject to MiCA.

What is a national competent authority?

A member state’s financial regulator or other authority responsible for supervising the relevant firm.

Why is national supervision a problem for large crypto platforms?

A platform can be authorised in one country while serving millions of users throughout Europe.

What is the home-regulator problem?

The firm’s primary regulator can be located in one relatively small jurisdiction while the effects of its decisions extend across the EU.

How does ESMA supervision help?

It can provide more consistent EU-wide oversight of the largest firms.

Does one EU rulebook already solve this?

Not entirely.

Why?

National regulators can interpret and enforce common rules somewhat differently in practice.

What is supervisory convergence?

It is the process of trying to make different national supervisors apply EU law consistently.

Is supervisory convergence the same as direct supervision?

No.

What is direct supervision?

The EU-level authority itself directly oversees the regulated entity.

Does direct ESMA supervision mean ESMA gives the company its MiCA licence?

Authorisation and supervision are separate concepts, and the final legislative structure will determine the exact division of responsibilities.

What is passporting?

It allows an authorised provider to offer services across the EU under the applicable single-market framework.

Why can passporting encourage regulatory shopping?

A firm may prefer to establish itself in a jurisdiction it believes offers easier or more predictable supervision.

Would direct ESMA supervision reduce that incentive?

For the largest cross-border firms, potentially.

Does it eliminate regulatory arbitrage completely?

No.

What is a significant CASP?

The exact final criteria are still being negotiated, but the concept focuses on scale, cross-border importance and market relevance.

Will customer numbers matter?

Potentially, depending on the final criteria.

Will trading volume matter?

Potentially, depending on the final text.

Could a firm become ESMA-supervised later as it grows?

Potentially, if it crosses the final significance thresholds.

Can a firm stop being significant?

The final rules will need review mechanisms for changing market conditions.

What happens during the transition?

The Council proposes a two-year transition using ESMA-led teams containing both EU and national experts.

Why use joint teams?

To transfer supervisory knowledge and avoid an abrupt loss of national expertise.

What happens after two years?

Permanent cooperation arrangements would continue, with ESMA responsible for final supervisory assessments and decisions for directly supervised firms.

Do national regulators disappear after that?

No.

What is the proposed ESMA executive board?

A new full-time board consisting of a chair and five independent members.

What would it do?

It would manage operations and take entity-specific decisions involving directly supervised firms.

Does ESMA’s Board of Supervisors disappear?

No.

What would the Board of Supervisors continue doing?

It would remain important for regulatory decisions, strategy, budget and supervisory convergence.

Who sits on the Board of Supervisors?

National supervisory authorities are represented within ESMA’s governance.

Is the October 9 deal final law?

No.

What stage is it?

It is the Council’s negotiating position.

What happens next?

The European Parliament needs its position and negotiations must produce a final legislative text.

Could Parliament change the scope?

Yes.

Could all CASPs still end up under ESMA?

The final outcome depends on negotiations, although the Council currently supports a narrower model.

Could the scope become even smaller?

Potentially.

Is Binance automatically affected?

That should not be assumed.

Why?

Binance’s MiCA authorisation and reverse-solicitation situation is a separate market-access issue, and direct supervision depends on the legal status of the relevant CASP entity.

Is reverse solicitation the same as direct supervision?

No.

What is reverse solicitation?

It is a narrow MiCA exception involving genuinely client-initiated business with a third-country firm.

What is direct ESMA supervision?

It is ongoing regulatory oversight of qualifying regulated EU entities.

Would ESMA supervision make customer funds guaranteed?

No.

Would it make exchange hacks impossible?

No.

Would it prevent Bitcoin losses?

No.

What does it improve?

Potentially consistency, governance oversight, cross-border coordination and supervisory accountability.

Would users still need to check withdrawal rules?

Yes.

Would users still need to check the legal entity?

Yes.

Why?

A global crypto brand can contain several legal entities with different regulatory relationships.

Would every product in one app necessarily fall under the same supervisor?

That should not be assumed without checking the relevant entity and product.

Why is this part of a bigger EU capital-markets package?

The EU wants to reduce supervisory fragmentation across its wider financial system.

Are traditional exchanges affected too?

The package also addresses major trading venues and post-trading institutions.

Does the package include tokenized markets?

It also proposes changes around the EU’s DLT Pilot Regime and wider digital-market development.

What is the biggest lesson?

MiCA created one European crypto rulebook, but supervision remained heavily national. The EU is now moving toward a two-tier system in which most CASPs stay with national regulators while the most important cross-border platforms would answer directly to ESMA.