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

European securities regulators say their current toolkit is insufficient 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 core issue is jurisdictional. Crypto firms can operate across multiple countries while supervision remains largely national, leaving regulators without a clear mandate over entities they can see but cannot fully oversee. Existing rules were also written for conventional securities and banking, not for token markets that trade continuously and settle on-chain.

For markets, the significance lies in what comes next. If regulators receive expanded powers, expect clearer registration requirements, tighter disclosure standards, and stronger enforcement against unlicensed operators. That could raise compliance costs for some firms while reducing legal uncertainty for others. Investors should watch how EU institutions respond, whether similar calls emerge in the UK and US, and whether any new authority is paired with a licensing framework rather than enforcement alone.