European regulators need more powers to police crypto, watchdog says - Reuters

European securities regulators say their current toolkit is not sufficient to supervise crypto markets, according to Reuters. The warning comes as digital assets increasingly overlap with traditional finance, exposing gaps in how watchdogs monitor trading venues, intermediaries and cross-border activity.

The concern is structural. Crypto firms often operate across multiple jurisdictions, while many activities fall between existing securities, banking and payments rules. That fragmentation can make it harder for regulators to detect misconduct, intervene quickly or hold entities accountable. The call for broader powers suggests supervisors want clearer authority over licensing, market surveillance and enforcement as the sector becomes more integrated with mainstream finance.

For markets, the development matters because regulation shapes access, compliance costs and institutional participation. Watch for concrete legislative proposals, any expansion of mandates at agencies such as ESMA, and how national authorities coordinate. Also monitor whether crypto firms adjust their European operations in response. The direction of travel is toward tighter oversight, but the timing and scope remain uncertain.