# EU Council Targets Most Significant Crypto Providers for ESMA Oversight

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/30349
Published: 2026-10-12T13:30:43.000Z
Updated: 2026-10-12T13:30:43.000Z
Section: Regulation

> The negotiating position would leave most providers under national regulators and would not immediately change MiCA requirements.

The European Union’s Council agreed Oct. 9 to place the most significant cross-border crypto-asset service providers under direct supervision by the European Securities and Markets Authority, tightening oversight across national markets.

The approach would narrow the current passporting system under the Markets in Crypto-Assets Regulation, or MiCA. The system allows a provider authorized in one EU member state to serve customers across the bloc without separate approval in every country. Most providers would remain under national regulators.

The announcement was issued at 5:40 a.m. ET (9:40 a.m. UTC) on Oct. 9. The negotiating position does not immediately change MiCA requirements.

The Council has not specified the thresholds for determining which providers qualify as “most significant.” Figures involving user counts, assets under custody, annual transactions or the estimated number of firms affected are not included in the confirmed framework.

For U.S. readers, the practical issue is which regulator would oversee the most significant cross-border activities of crypto-asset service providers serving Europe. Under the proposed structure, those providers would shift from home-country supervision to an EU-level authority, while smaller providers would generally remain under national oversight.

The proposal is narrower than an earlier European Commission plan that would have placed all crypto-asset service providers under ESMA’s direct supervision. It also calls for a full-time ESMA executive board consisting of a chair and five independent full-time members.

A two-year transition period would allow EU and national experts to transfer supervisory responsibilities. The plan follows earlier concerns about differences in national authorization and supervision. A July 2025 review of a Malta-authorized provider found that material issues remained unresolved when the Malta Financial Services Authority granted authorization and that some risk areas had not been adequately assessed, while Malta had sufficient supervisory resources and expertise.

The Council must formally adopt its negotiating position before discussions with the European Parliament can begin. Parliament must first adopt its own position before the two institutions can negotiate a final text.