The article discusses misconceptions among DeFi teams regarding the MiCA regulation's exemption for fully decentralized services, emphasizing that true decentralization is complex and requires no single entity to control governance or infrastructure. It warns that many DeFi systems do not meet these criteria, potentially necessitating CASP authorization for teams operating in Europe.
For fintech professionals focusing on DeFi and regulation, it's crucial to reassess the applicability of the MiCA exemption for fully decentralized systems. Many DeFi projects mistakenly believe they qualify for this exemption, but the criteria demand no single entity controls protocol parameters or governance. A practical audit of how a protocol operates, rather than relying solely on its label, is essential to ensure compliance and avoid unexpected regulatory requirements.