The Malta Financial Services Authority (MFSA) has initiated consultations on the regulation of DeFi projects. The regulator proposed assessing decentralization not as a binary characteristic but as a spectrum: protocols with centralized elements such as administrative keys, management concentration, update rights, and control over user interfaces may fall under MiCA's jurisdiction.
MFSA also seeks input from market participants on whether regulated crypto companies should be required to conduct audits of smart contracts, governance checks, and risk assessments before integrating DeFi protocols.