Summary
ESMA began an EU-wide operational resilience review of crypto custody on July 8. National regulators will conduct risk-based spot checks on licensed entities across seven areas: private key management, hot/cold wallet controls, multi-signature, governance, and incident response. This aligns with Mi…
Key points
- Crypto custody providers can pre-assess their operational standards to ensure compliance with upcoming EU supervisory requirements, avoiding significant deficiencies during reviews.
- ESMA's first substantive operational resilience test for MiCA-licensed custodians marks the EU's shift from licensing oversight to ongoing supervision.
- Users can expect safer crypto asset custody mechanisms, while providers must enhance system resilience and invest in compliance, or face potential business restrictions or fines.
- Analogous to bank stress tests, this is the crypto industry's first systematic collective review of operational resilience, mirroring traditional financial regulatory approaches.
Editorial note
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