EU's tighter DeFi rules may push users to higher-risk platforms

Tighter European Union regulation of DeFi could ultimately weaken investor protection, Coinbase's EU policy chief Roeland Van der Stappen said in an interview with Cointelegraph. Van der Stappen said platforms subject to the rules may restrict or suspend access to DeFi, prompting investors to shift to platforms with lower levels of protection. Lending, liquidity provision and onchain trading could be affected, he added, while more stringent regulation could disperse DeFi liquidity and hurt cryptocurrency prices through liquidity fragmentation. The European Securities and Markets Authority proposed in September creating a new regulatory category for companies that provide access services to DeFi protocols.