The introduction of the Markets in Crypto-Assets Regulation (MiCA) across the European Union marks a transformative step for crypto-asset service providers (CASPs) and investors alike. One of the most significant elements of this new regulatory landscape is the set of guidelines published by the European Securities and Markets Authority (ESMA) in July 2025, which define the criteria for the assessment of knowledge and competence for individuals providing information or advice on crypto-assets or crypto-asset services.

These guidelines are not merely another compliance obligation. They aim to address longstanding gaps in investor protection, standardization of skills, and the harmonization of supervisory practices in an industry often associated with high risks, rapid innovation, and widely varying levels of expertise among market participants. ESMA’s focus is clear: those who interact directly with clients—either to provide information or advice—must demonstrate a rigorously assessed level of knowledge and competence, tailored to the nature of crypto-assets and the fast-changing risk environment.

The MiCA framework was developed against a backdrop of soaring retail participation in crypto markets, increasing regulatory scrutiny, and repeated calls for enhanced investor protection. The knowledge guidelines form a cornerstone of this regulatory push, targeting areas where information asymmetry and operational risks are particularly acute.

Defining Knowledge and Competence Under MiCA

Under Article 81 of MiCA, CASPs are explicitly required to ensure that any natural person giving advice or information about crypto-assets or related services has the requisite knowledge and competence. ESMA’s guidelines take this further, extending their application not only to those giving advice, but to anyone who directly provides information to clients—whether in person, online, or via automated channels.

What constitutes “knowledge and competence” in this context? ESMA’s guidelines offer a detailed, multi-layered approach:

• Core Understanding: Staff must grasp the key features, risks, and operational mechanics of crypto-asset services offered, including how distributed ledger technologies work, the characteristics of the specific protocols in use, and the impact these may have on transaction risk and complexity.
• Risk Awareness: The guidelines emphasize awareness of the unique risks facing crypto investors, such as volatility, cybersecurity threats, operational bugs, private key management, and cross-chain transfer issues.
• Market Functionality: Knowledge extends to market structures, fee mechanics, the influence of large holders on liquidity and price, and the difference between traditional financial markets and crypto markets, particularly with respect to investor protection.
• Compliance Literacy: Staff are also expected to understand relevant anti-money laundering (AML), market abuse, and data requirements, as well as how MiCA differs from previous frameworks like MiFID II in terms of client protections.

This holistic skillset is meant to ensure that staff not only answer clients’ questions accurately but are also equipped to navigate and communicate the specific risks and protections relevant to the crypto ecosystem.

Minimum Training, Experience, and Ongoing Professional Development

A key innovation of the ESMA guidelines is the explicit establishment of minimum thresholds for professional qualification and experience, along with a focus on continuous professional development (CPD).

• For Information Providers: Staff must either complete at least 80 hours of professional training along with six months of supervised experience, or alternatively, have a minimum of one year of relevant supervised experience.
• For Advisers: The bar is higher. Staff must meet one of several routes, including a tertiary education degree plus one year of experience, a three-year secondary education plus experience, 160 hours of targeted professional training plus experience, or two years’ experience under MiFID II/IDD plus six months of crypto experience.

These pathways are designed to balance rigor and flexibility. For example, pre-existing qualifications relevant to financial markets may count toward the required hours, provided they adequately cover the content outlined by the guidelines.

Existing staff—those already providing information or advice at the time the guidelines take effect—may be recognized as competent if they have been continuously active in their roles for at least a year, but ongoing assessment is mandated. ESMA recommends that all staff, new or existing, participate in regular CPD, with a baseline of 10 hours per year for information providers and 20 hours for advisers, adjustable based on the complexity and range of services provided.

Importantly, ESMA encourages the use of both internal and external assessment mechanisms to demonstrate knowledge acquisition and retention, with competent authorities able to publish lists of recognized professional education providers.

Proportionality, Enforcement, and the Challenge of Harmonization

A central tenet of the ESMA guidelines is proportionality. Not every CASP faces the same risk profile or operational complexity. The guidelines allow for adaptation based on the types of crypto-assets offered, the complexity of the business, and the channels through which services are provided.

• Automated Services: For services provided via automated or semi-automated means, the knowledge requirements apply to the staff who set or oversee the algorithms that determine the content delivered to clients, ensuring that clients still receive accurate and risk-appropriate information.
• Organizational Accountability: Management bodies within CASPs are required to review and update knowledge assessment policies annually, ensuring that deficiencies are addressed and policies remain fit for purpose as the regulatory and technological environment evolves.
• Transition Period: The guidelines will apply six months after their publication in all EU languages, giving CASPs and national authorities a defined window to adjust and prepare.

One area of ongoing debate is the verification of competence. Stakeholder groups, such as the Securities and Markets Stakeholder Group (SMSG), have advocated for external verification of staff competence to avoid conflicts of interest and inconsistent standards across the EU. While ESMA’s guidelines currently allow for internal or external assessments, the door remains open for future standardization as the market matures.

The guidelines also clarify that the requirements for knowledge and competence are without prejudice to other existing frameworks, such as the MiFID II guidelines, and should be seen as an additional layer, reflecting the unique risks and characteristics of crypto-assets.

The Broader Impact: Investor Protection, Market Integrity, and Compliance Culture

The rationale for these guidelines is unambiguous: to raise the quality of information and advice provided to investors and to foster greater trust in crypto markets. This has knock-on benefits for all stakeholders:

• For Investors: Consistent, knowledgeable engagement reduces the risk of mis-selling, poor investment decisions, and susceptibility to scams or misinformation.
• For CASPs: Higher professional standards support the reduction of conduct risk, potential litigation, and reputational damage, while also facilitating cross-border operations by harmonizing expectations across the EU.
• For Regulators: Harmonized standards enhance supervisory convergence and efficiency, making it easier to oversee a dynamic, fast-evolving sector and to intervene when necessary.
• For Market Development: As confidence in the professionalism of market intermediaries grows, so too does the potential for responsible innovation and sustainable growth in the EU crypto sector.

However, the guidelines also acknowledge challenges. Not all crypto-assets pose equal risk. The standards must be proportionate and not unduly burdensome for providers of low-risk services or limited product ranges. Furthermore, there is an ongoing need for independent verification and transparency around educational standards and CPD providers to avoid fragmentation.

Conclusion: Building a Culture of Competence in European Crypto Services

ESMA’s MiCA knowledge and competence guidelines represent a significant step toward a more mature, trusted, and resilient crypto market in Europe. By introducing measurable standards for training, experience, and ongoing development, these guidelines do more than box-ticking compliance. They seek to embed a culture of professional competence and investor focus in a sector that has long struggled with trust and credibility.

The coming years will test the adaptability of CASPs, the rigor of national supervisors, and the effectiveness of the guidelines in closing knowledge gaps without stifling innovation. The success of these reforms will be measured not just in enforcement actions or supervisory reports, but in the confidence of everyday investors and the broader legitimacy of the crypto industry within the EU’s financial ecosystem.

As MiCA’s broader provisions continue to roll out, the knowledge and competence guidelines will serve as a foundational benchmark for the industry, one that other jurisdictions may soon seek to emulate.

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Related Links

• Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA)
• MiFID II Guidelines for Knowledge and Competence
• European Securities and Markets Authority (ESMA) Official Website
• European Commission Crypto-Assets Factsheet

Other FinCrime Articles About MiCA

• ESMA Clarifies Stablecoin Custody and Transfer Rules under MiCA Regulation
• ESAs Set Clear Guidelines for Crypto-Asset Classification Under MiCAR
• Why Crypto Companies Struggle to Understand MiCA Sustainability Reporting Requirements

Source: ESMA Final Report on MiCA Guidelines (Official PDF – July 2025)

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