Cardano Foundation urges EU against expanding MiCA rules to DeFi and staking
The foundation called for regulation based on financial risks rather than technology, warning that overlapping rules could create uncertainty for crypto businesses across the EU.
The Cardano Foundation has urged the European Union to refrain from expanding the MiCA regulations to encompass decentralized finance (DeFi) and staking activities. In a blog post, the foundation argued that existing financial laws should dictate these functions and risks based on their substance, rather than their underlying technology.
The foundation emphasized that direct participation in decentralized networks, such as delegating ADA tokens, should be treated differently from staking services provided by intermediaries. By advocating for a distinction between these activities, the Cardano Foundation aims to avoid the creation of regulatory uncertainty for crypto businesses across the EU.
This stance aligns with EU regulators' consideration of expanding oversight of crypto services, as evidenced by ESMA's recent recommendation for additional safeguards in staking, lending, and borrowing. Additionally, the foundation has joined other blockchain organizations in urging the US Securities and Exchange Commission to recognize digital commodities as non-securities under its proposed crypto framework.
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