Malta mulls how to regulate DeFi projects with centralized elements

The Malta Financial Services Authority (MFSA) is exploring how to regulate decentralized finance (DeFi) within the European Union's Markets in Crypto-Assets (MiCA) framework, CoinDesk reported. In an internal discussion paper released today, the MFSA noted that many DeFi projects still possess centralized elements, such as admin keys, concentrated governance power, and control over protocol upgrades and user interfaces. The authority pointed out that while MiCA exempts crypto-asset services provided in a "fully decentralized manner," there is no clear definition of what meets this standard. The MFSA's review will focus on how to define "fully decentralized" to determine how DeFi can be incorporated into the MiCA regime.