Malta's financial regulator explores bringing parts of DeFi under MiCA's orbit

PolicyMalta's financial regulator explores bringing parts of DeFi under MiCA's orbitThe MFSA is seeking feedback on whether decentralization should be assessed as a spectrum rather than a binary concept.By Jamie Crawley, AI Boost|Edited by Omkar Godbole Jun 18, 2026, 10:43 a.m. 1 min readMake preferred on ShareShare this articleCopy linkX iconX (Twitter)LinkedInFacebookEmailMake preferred on SummaryShowMalta's financial regulator is exploring how decentralized finance (DeFi) could fit within the European Union's MiCA framework.The MFSA said many DeFi projects retain several centralized features in a discussion paper published Wednesday.EU's framework for regulating crypto excludes services provided in a fully decentralized manner, but lacks a clear description of when a protocol or platform meets that threshold. Malta's financial regulator is exploring how decentralized finance (DeFi) could fit within the European Union's Markets in Crypto-Assets (MiCA) framework, focusing on governance, accountability and the meaning of "full decentralization."The Malta Financial Services Authority (MFSA) said that while MiCA excludes cryptocurrency services provided in a "fully decentralised manner without any intermediary," many DeFi projects retain centralized features such as administrator keys, governance concentration, protocol upgrade rights and control over user-facing interfaces, in a discussion paper published Wednesday.The regulator is seeking feedback on whether decentralization should be assessed as a spectrum rather than a binary concept and whether a standardized framework should be developed to determine when a protocol falls outside MiCA's scope.DeFi is something of a grey area under the EU's framework for regulating crypto, as it excludes services provided in a fully decentralised manner, but lacks a clear description of when a protocol or platform meets that threshold. MSFA's paper also asks whether regulated crypto firms should be required to conduct smart-co…

Malta's financial regulator explores bringing parts of DeFi under MiCA's orbit

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