Europe's top markets regulator has formally asked the European Commission for expanded enforcement powers under the Markets in Crypto-Assets Regulation, including the authority to freeze crypto assets and block websites tied to fraud.

On September 30, 2026, the European Securities and Markets Authority (ESMA) published its response to the Commission's public consultation on reviewing MiCA. The submission argues that current procedures move too slowly to counter suspected criminal activity and unauthorized operators, and that threats linked to money laundering or terrorist financing can dissipate before regulators act at all.

The proposals now feed into an ongoing Commission review of MiCA, which sits inside a broader debate over centralizing supervisory responsibilities across the EU's financial regulatory framework.

What ESMA wants

The core of ESMA's complaint is speed. The regulator is calling for the power to freeze crypto assets on what it describes as "reasonable grounds" connected to financial crimes — a standard designed to let authorities act before funds move beyond reach.

The second major request targets the front door of most crypto fraud: the website. ESMA wants national competent authorities, the country-level regulators that supervise firms day to day, to gain the ability to block websites connected to scams.

ESMA also flagged gaps in marketing supervision. Its recommendations include banning misleading marketing techniques, with the measures framed as taking effect immediately.

The offshore problem

Non-EU firms feature prominently in the submission. ESMA raised concerns about companies based outside Europe that target EU investors and suggested measures against operators that solicit European customers without MiCA authorization.

That carries direct competitive consequences. If the measures advance, licensed providers would face less competition from rivals that skipped the authorization process entirely — while unauthorized offshore platforms would confront a harder path into the European market.

Operational and legal questions

For crypto-asset service providers, tighter enforcement typically means higher compliance costs. Restrictions on marketing could also reshape how digital asset firms acquire customers and scale, forcing distribution strategies built on aggressive promotion to be rebuilt around disclosure requirements.

The proposals leave open design questions that will shape industry response. A "reasonable grounds" standard for freezing assets gives regulators speed, but the threshold remains undefined — as does the recourse available to anyone caught in a mistaken freeze. Website blocking raises similar concerns about how quickly scammers can relaunch under new domains and how consistently national regulators would apply the power across member states.

For retail investors in Europe, the package points toward a market with more guardrails. Faster asset freezes and the ability to block fraudulent sites would make it harder for operators to take deposits and disappear.

Recommendations, not law

For now, the submission carries no legal force. The European Commission must still weigh ESMA's input as part of its MiCA review, alongside the parallel debate on whether to centralize supervision at the EU level rather than leave it primarily with national authorities.

The outcome of that review will determine whether Europe's crypto rulebook gains the enforcement teeth ESMA says it lacks — and how quickly regulators can act the next time an unauthorized operator targets European investors.