Malta Pushes Back Against ESMA Plan to Centralize Crypto Oversight

Highlights:

• Malta warns that EU plans may weaken its crypto regulatory advantage that it has built.
• Crypto oversight changes in the EU could push firms to move to Dubai, Asia, and the US.
• MiCA licensing has expanded across Europe, but adoption remains uneven among member states.

Malta has openly opposed a European Union proposal to centralize crypto supervision under ESMA. The proposal would transfer oversight from national regulators to a single authority based in Paris. If approved, Malta will lose direct control over firms like Crypto.com, Gemini, and Bitpanda.

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Malta’s Financial Services Authority officials argue that the proposal would weaken the expertise the country has built. Malta’s regulators view the ESMA proposal as politically motivated. They claim the action is against countries that developed crypto regulation early.

🇲🇹 NOW: Malta warns that if the EU pushes ahead with centralizing crypto oversight under ESMA, firms will simply pack up and move to Dubai, Asia, and the US.#forexblog #governorblog #forexmarket #FX #fypシ゚viralシfypシ゚ pic.twitter.com/qPv1ZhFbLx

— Governor Blog (@governorblog) April 1, 2026

Kenneth Farrugia, head of Malta’s regulator, has defended the country’s position during recent discussions. He explained that Malta gained its lead in the field through early regulatory strategy and market knowledge. He added that other jurisdictions did not initiate planning when crypto markets began to grow. Hence, he argues that progress should not disadvantage pioneers in the European Union.

Tensions have grown between Malta’s regulator and EU institutions over control of crypto supervision. France, Italy, and Austria are backing the ESMA regulation due to the licensing variations. ESMA officials say firms engage in regulatory arbitrage to choose lenient EU jurisdictions. This concern has pushed several policymakers to support centralized oversight across member states.

Malta’s Early Crypto Strategy Clashes With EU’s MiCA Framework Shift

Malta developed rules to encourage companies looking for clear and regulated markets in the European area. Legal expert Ian Gauci said companies were attracted to Malta because the regulators in the country had a handle on technology and business models. He explained that experienced supervision reduces risks and improves compliance outcomes for companies. The government expects that the crypto sector will help the nation’s GDP, similar to how the gaming industry has done.

The European Union introduced the MiCA framework to standardize crypto licensing across member states. MiCA allows companies licensed in one EU state to operate in any EU member state. This passporting system diminishes Malta’s advantages as a crypto hub. However, Malta was the first member state to issue four of the first 15 MiCA licenses in the early stages of the roll-out.

Malta now has thirteen licensed crypto service providers operating under the MiCA regime. Meanwhile, ESMA reviewed Malta’s decision to license OKX. Regulators questioned whether Malta fully assessed the company’s past compliance record. Malta dismissed the claims and accused ESMA of trying to delay its licensing process.

OKX is accelerating at a critical moment for global crypto markets.

With the EU’s MiCA framework now in force and a Malta PI licence secured, the regulatory pathway for European payment infrastructure is effectively in place.

Concurrently, the launch of an AI-powered…

— VIZO (@VizoExchange) March 3, 2026

Crypto Oversight Could Shift Firms to Global Markets

The Malta regulator fears the new European Union rules will lead to crypto businesses relocating. They identified Dubai and the United States as some of the attractive regions that crypto companies might relocate to. The jurisdictions offer clear regulations and faster licensing processes than the MICA plan that Europe has adopted.

Crypto companies are virtual, which means they can relocate easily with limited infrastructure costs. This flexibility allows companies to respond quickly to regulatory changes across different jurisdictions. Crypto executives in Malta warn that centralized oversight in Paris could reduce access to local regulatory support.

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