Crypto money

New guidance from the European Securities and Markets Authority (ESMA) aims to improve transparency for retail investors about the crypto sector, including its environmental impact.

In a new report, the regulator sets out a second series of proposed technical standards under the region’s crypto rules, known as the Markets in Crypto-Assets Regulation (MiCA), which are designed to enhance disclosure to retail investors and improve clarity for the industry on the details of disclosure and record-keeping requirements, and data standards.

The report includes regulatory guidance on pre- and post-trade transparency requirements, business continuity plans for crypto firms, and order book and record-keeping requirements.

“Once in place, this will ensure that [national regulators] have access to the information needed for effective supervision of the EU cryptoasset market,” the regulator said in a release.

The report also provides guidance on the kinds of disclosure that investors should receive about the environmental impact of the blockchains used to validate crypto transactions.

“The report covers public disclosures, helping investors to understand the impact on the climate and the environment of the consensus mechanisms underpinning the cryptoassets they hold,” ESMA said.

The regulator’s report also sets out “how issuers should disclose price-sensitive information to the public to prevent market abuses, such as insider dealing.”

The report also includes guidance on the requirements for crypto white papers to be machine readable and accessible to investors.

Once these proposed standards are finalized, they will be submitted to the European Commission, which will have three months to decide whether to adopt them.