ESMA Proposes Regulating DeFi Access Points under MiCA
The European Securities and Markets Authority (ESMA) has proposed regulating access points to decentralized finance (DeFi), rather than the protocols themselves. The proposal aims to limit the scope of the DeFi exemption in the MiCA regime, which currently excludes DeFi from regulation.
Under the current rules, only 281 out of 1,343 monitored crypto service providers in the European Economic Area (EEA) had obtained MiCA authorization before the transition period ended on July 1. The proposal could lead to a significant increase in compliance requirements for service providers operating across borders.
The ESMA also suggested stricter regulations for marketing by influencers and third parties, improved transparency in costs, and proportionate requirements for staking, borrowing, and lending. Additionally, the authority wants greater powers to take down fraudulent websites, seize cryptoassets linked to market manipulation or terrorist activities, and impose limitations on exchanges of stablecoins with non-compliant status.