Regulation Scope Explanation by ESMA under MiCAR Services
European Union Introduces Regulatory Framework for Cryptocurrency Sector and Clarifies Staking and Copy Trading Services
Under the European Union’s new regulatory framework for the cryptocurrency sector, the Markets in Crypto-Assets Regulation (MiCAR), the European Securities and Markets Authority (ESMA) has provided key clarifications on staking and copy trading services.
In a series of Q&A documents, ESMA_QA_2067 and ESMA_QA_2463, the regulatory body outlines specific regulatory requirements for these services.
Staking Services
ESMA clarifies that crypto asset service providers (CASPs) may offer staking services only if the profits generated are allocated directly to the clients who hold the staked assets. The regulatory focus is on whether the operator acts as an intermediary.
When staking is conducted directly by the owner of the crypto asset (decentralized), MiCAR does not impose additional requirements. However, if an intermediary is involved—i.e., the CASP manages or pools staked assets and redistributes the rewards—a stricter regulatory approach applies. In that case, the staking service falls within MiCAR scope and demands appropriate authorization and compliance measures under the regulation.
Copy Trading Services
ESMA extends principles from the existing Markets in Financial Instruments Directive (MiFID II) framework to copy trading offered by CASPs. This means copy trading services must comply with investor protection requirements similar to traditional financial services.
ESMA’s clarifications emphasize the need for appropriate authorization under MiCAR and adherence to transparency, disclosure, and fair treatment of clients rules typically applied under MiFID II to safeguard users engaging in copy trading.
Regulatory Requirements
In summary, MiCAR, as interpreted by ESMA in these Q&As, mandates that:
| Service | Regulatory Requirement under MiCAR/ESMA | |----------------|--------------------------------------------------------------| | Staking | Allowed if rewards go directly to stakers; intermediaries managing staking must be authorized and comply with MiCAR. | | Copy Trading | Subject to MiFID II-like investor protection rules, including authorization, transparency, and client safeguards. |
These clarifications ensure that CASPs offering these innovative crypto-asset services operate within a defined regulatory perimeter promoting investor protection and market integrity, aligning crypto activities with established financial regulatory principles.
No conflicting details or exceptions are highlighted in the provided sources. The information reflects a recent update (July 2025), marking practical implementation guidance from ESMA within the evolving EU crypto regulatory landscape.
The European Securities and Markets Authority (ESMA) has published these Q&A documents to provide practical guidance for CASPs operating in the EU. CASPs are advised to carefully review these documents and ensure compliance with the regulatory requirements to maintain market integrity and protect investors.
- businesses offering staking services in the European Union, under the MiCAR regulation, must ensure that rewards generated from staking are allocated directly to the clients who hold the staked assets. If an intermediary is involved in managing or pooling staked assets, the staking service falls within the MiCAR scope and demands appropriate authorization and compliance measures.
- when it comes to investing in copy trading services in the EU, regulatory bodies such as the European Securities and Markets Authority (ESMA) apply principles similar to those under the MiFID II framework, meaning these services must comply with investor protection requirements that are typical of traditional financial services.
