Cardano Foundation Urges EU Not to Extend MiCA Rules to DeFi and Staking

Golden Finance reported on October 22 that the Cardano Foundation has urged the European Union not to introduce new independent regulatory rules targeting DeFi and staking, advocating that existing financial laws should regulate activities based on their functions and risks rather than the technology employed. In a blog post published on Wednesday, the foundation outlined its 19-page opinion submitted to the European Commission on September 30, calling for a distinction between direct participation in decentralized networks and financial services provided by intermediaries, especially those involving custody or control of user assets. The foundation stated that regulation should follow the substance of the activity, the functions performed, and the risks generated, rather than the technology underpinning the activity. It emphasized that Cardano users can delegate native ADA tokens to help secure the network without relinquishing custody or locking up tokens, and this direct participation method should be treated differently from staking services operated by intermediaries. The opinion also called for clearer differentiation between the EU's MiCA regulations and existing financial laws, warning that overlapping regulatory requirements and inconsistent interpretations among member states could create uncertainty for crypto businesses. This move comes as EU regulators consider expanding oversight of crypto services. In September, the European Securities and Markets Authority proposed additional safeguards for staking and lending activities and suggested creating a new regulated service category for companies providing access to DeFi protocols. Additionally, on October 20, the Cardano Foundation, along with five other blockchain organizations, jointly sent a letter to the U.S. Securities and Exchange Commission, urging it to formally recognize digital commodities as non-securities under the proposed crypto framework.