European Securities and Markets Authority (ESMA) Risk Analysis & Economics Department head Steffen Kern told the committee that ESMA “has neither regulated nor supervised FTX” and has no “information on the company beyond what is in the public domain.” The ESMA does not see significant risks to the broader financial sector from the collapse of FTX given small portion of the total market represented by crypto and the limited connections between crypto and traditional finance.

Kern concluded by saying Markets in Crypto-Assets Regulation (MiCA) legislation, due to come into force in 2024, “is tackling the right issues to introduce vital protections for investors and important rules for market participants through a common EU regime.”