European Union Regulatory Agency Discusses MEV Issue: Reordering Blockchain Transactions Could Constitute Market Abuse

In a series of proposals under the MiCA regulation, ESMA considers MEV as potential suspicious behavior. MEV typically involves blockchain operators, entities responsible for adding blocks to the chain, rearranging the order of transactions to extract additional profits before the transactions are permanently recorded on the blockchain. This manipulation may include frontrunning, where operators place their own transactions ahead of user-submitted transactions, potentially compromising the fairness and integrity of the blockchain.