The European Securities and Markets Authority (ESMA) has issued a remarkable warning to investment companies offering cryptocurrency-related derivative products. It was emphasized that especially the products known as “perpetual futures” or “perpetual contracts” are included in Contracts for Difference (CFD) in terms of legislation. This step indicates that regardless of how companies define the relevant financial products, they will be subject to national regulations.
Operational Standards for Cryptoderivatives in the EU
While leveraged transactions in the derivative market related to crypto assets have increased recently, ESMA stated that there is a need for stronger supervision regarding these risky transactions for assets such as Bitcoin and Ethereum. According to current EU regulations, products falling into the CFD category must comply with certain protection measures. Among these; Elements such as leverage limitation, mandatory risk warnings and negative balance protection stand out. At the same time, investment companies are prohibited from encouraging individual investors to engage in these risky transactions by offering them money or other benefits.
Distribution Rules for Complex Crypto Products
In ESMA’s statements, it was underlined that investment companies cannot escape liability by claiming to have changed the structure of the products. For example, add-ons such as “insurance fund” or funding rate mechanisms do not create any change in the basis of the derivative product. It was stated that these complex financial instruments should only be offered to a narrow target audience and that mass marketing activities conflict with consumer protection.
In addition, firms providing services without investment advice are required to conduct a suitability assessment to determine whether individual clients understand the risks. It was reported that companies should effectively manage conflicts of interest, especially in case of derivative issuances and transactions on platforms within the same group.
ESMA shared the view that “Even if businesses make some adjustments to the structure of the products they offer, the nature of the underlying financial instrument does not change. Inappropriate mass marketing of derivative products or incentive practices are incompatible with existing regulations.”
New Era: Regulatory Compliance and Transition Process with MiCA
These developments coincide with the mid-2026 transition period of MiCA, the comprehensive legal framework covering crypto assets in the EU. Before MiCA, which aims to regulate the industry in general, comes into force, ESMA continues to manage sudden risks in the market within the scope of its existing powers. In this context, the EU’s MiFID II regulation, which ensures financial market discipline, is also actively used.
The EU’s strategy in the field of digital finance has recently moved away from the general supervision approach and started to emphasize individual investor security and enforcement measures. This change was also evident when Switzerland-based Hashgraph Group implemented the Hedera-based supply chain platform TrackTrace for the EU’s Digital Product Passport application.
The latest steps reveal that the regulatory focus on the crypto ecosystem in the EU is deepening and companies will have to strictly comply with both existing rules and upcoming new regulations.
