GENEVA
The Cardano Foundation is pushing back against European Union proposals for new standalone DeFi and staking regulations, arguing instead that existing financial frameworks should apply to crypto activities based on their function and risk profile rather than underlying technology.
The foundation detailed its position in a 19-page submission to the European Commission dated Sept. 30, made public Oct. 21. The core argument: regulators should distinguish between direct participation in decentralized networks—where users retain custody and control—and financial services provided by intermediaries that custody or control user assets.
Cardano's native staking model illustrates the distinction. ADA holders can delegate tokens to validators without relinquishing custody or locking assets. The foundation contends this mechanism should face different regulatory treatment than staking-as-a-service offerings from centralized operators.
The submission flagged potential overlap and inconsistency between the EU's Markets in Crypto Assets Regulation (MiCA) and existing financial laws. Divergent interpretations across member states could fragment compliance for crypto businesses operating in the bloc, the foundation warned.
The timing reflects broader regulatory momentum. In September, the European Securities and Markets Authority proposed additional safeguards for staking, lending, and borrowing activities and suggested creating a new regulated service category for firms providing DeFi protocol access.
On Oct. 20, the Cardano Foundation joined five other blockchain organizations in a letter to the U.S. Securities and Exchange Commission urging formal recognition of digital commodities as non-securities under its proposed crypto framework.
