European regulators need more powers to police crypto, watchdog says

PARIS, Sept 30 (Reuters) - The ‌European Securities ​and ​Markets Authority said on Wednesday that European regulators should be given more powers to help them enforce ‌crypto rules, and that ESMA should be able ⁠to tell crypto companies to freeze crypto assets when they have reasonable ‌grounds to suspect that they ‌are linked to crime.

• ESMA said national regulators, who are responsible for enforcing the European Union's crypto regulation, called MiCA, ​could be given powers to remove websites for scams or unauthorised crypto companies.

• They and ESMA should be ⁠given more power to make crypto companies freeze assets in the case of financial ​crime, money-laundering or terrorist financing, ESMA said.

• "Because of current lengthy procedures, when the freezing of suspicious crypto assets (linked ​to criminal activities) is requested, ‌it is often too late and the assets have disappeared," it said.

• ESMA also proposed that ⁠certain misleading crypto marketing techniques should be banned and there should be rules for third-party marketing.

• Country-level regulators should be given specific ⁠powers to combat crypto companies in non-EU countries which actively solicit EU ​investors without having authorisation, ESMA said.

• It proposed that crypto companies should be required to provide full cost information to customers.

• The proposals ‌are part of the watchdog's response to a consultation on MiCA, which is being reviewed. A ‌group of central banks in Europe also published their response ⁠last week.

• Some regulators ‌have expressed concern about ​regulatory divergence and patchy enforcement of the MiCA rules.

(Reporting by Elizabeth Howcroft in Paris; Editing by Emelia ‌Sithole-Matarise)

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