The Malta Financial Services Authority (MFSA) is launching consultations regarding the regulation of decentralized finance (DeFi) projects. The authority aims to evaluate decentralization on a continuum rather than a strict binary classification. This means that protocols exhibiting centralized features—such as administrative keys, concentrated management, update rights, and user interface control—could be subject to the Markets in Crypto-Assets Regulation (MiCA).
Additionally, the MFSA is seeking feedback from industry stakeholders on whether crypto firms should be mandated to perform audits of smart contracts, governance evaluations, and risk assessments prior to the integration of DeFi protocols.
