The European Securities and Markets Authority (ESMA) has formally called for new powers to freeze crypto assets and block websites linked to financial fraud, according to a report by cryptonews.net citing the regulator's contribution to the European Commission's review of the Markets in Crypto-Assets Regulation (MiCA).

The requested mandate would represent a significant expansion of ESMA's current role. Today, the Paris-based authority coordinates national supervisors and issues technical standards, but direct enforcement — including asset freezes and website blocking — remains the province of member-state regulators and national courts. ESMA appears to be arguing that this fragmentation leaves enforcement gaps that cross-border fraud schemes exploit.

The proposal lands amid the Commission's ongoing evaluation of MiCA, the EU's comprehensive crypto framework that took full effect for asset-referenced tokens and e-money tokens in June 2024 and extended to crypto-asset service providers across the bloc in December 2024. The review period gives Brussels an institutional opening to reshape supervisory architecture before the framework matures further.

What the new powers would cover

According to the report, ESMA is seeking two specific capabilities. The first is authority to freeze crypto assets held by entities under investigation, a measure that currently requires action by national competent authorities or judicial orders in individual member states. The second is the ability to block access to websites facilitating investment fraud, a tool that several national regulators — including Italy's Consob and Spain's CNMV — already deploy within their own jurisdictions but that no EU-level body possesses.

The operational logic is straightforward. Crypto fraud schemes routinely operate across multiple member states simultaneously, moving funds through chains of wallets faster than national authorities can coordinate mutual assistance requests. A pan-European freeze and blocking capability would compress that response time from weeks to hours.

The supervisory architecture debate

ESMA's request feeds into a broader argument over whether EU-level financial policing should sit with national authorities or a centralized regulator. The same tension shaped negotiations over MiCA itself, where member states ultimately retained significant supervisory discretion while delegating limited coordination powers to ESMA and the European Banking Authority.

Any move to grant ESMA direct enforcement powers would require legislative amendment to MiCA or a separate EU instrument, meaning the European Parliament and Council would both need to sign off. That process typically takes years, and national regulators can be expected to resist ceding authority they currently hold.

For crypto firms operating in the EU, the implications are operational rather than marginal. An ESMA with freeze powers would change custody, compliance and fund-segregation procedures for licensed CASPs, and would raise the stakes for firms whose authorization is under review. Exchanges and custody providers would likely face faster takedown demands and stricter cooperation obligations under any expanded mandate.

What comes next

The Commission's MiCA review is expected to produce concrete legislative proposals, though the timeline for any amendment — and whether it includes the enforcement powers ESMA has requested — remains uncertain. Market participants should watch the Commission's forthcoming review conclusions and any subsequent parliamentary committee hearings, which will signal whether Brussels intends to centralize crypto enforcement at the EU level or preserve the current national-authority model.

This article is based on a report by cryptonews.net summarizing ESMA's contribution to the MiCA review. Specific details of the regulator's submission were not available at press time.