Malta has advanced decentralized finance regulation in Europe by proposing a legal framework that could formally recognize decentralized autonomous organizations (DAOs) as “software-based organizations.” The Malta Financial Services Authority (MFSA) released the proposal for public feedback on how DeFi projects should be treated under the European Union’s Markets in Crypto-Assets (MiCA) regime, reflecting broader efforts to address regulatory gaps in blockchain-based financial services.
The consultation, open until July 10, proposes separating the legal treatment of organizations from the protocols they operate. Instead of creating a dedicated legal structure for DAOs, the MFSA suggests recognizing them as software-based entities governed primarily by code and decentralized decision-making.
The regulator noted that fully decentralized projects generally fall outside MiCA’s scope. However, many DeFi protocols retain some centralized control, complicating accountability and regulatory oversight.
Malta, known as one of Europe’s most crypto-friendly jurisdictions since introducing an early digital asset framework in 2018, aims to build on this legacy by providing greater legal clarity for DeFi participants with its latest proposal.
This discussion occurs as European policymakers debate whether further regulation is needed beyond MiCA. Recent European Central Bank studies found that governance in several major DeFi protocols remains highly concentrated, raising questions about their decentralization.
Some policymakers remain cautious about introducing a separate DeFi rulebook. European Commission adviser Peter Kerstens recently suggested that integrating tokenized assets into the existing framework may be more important than creating a second version of MiCA focused on decentralized finance.
The outcome of Malta’s consultation could shape broader EU discussions as regulators seek to balance innovation, accountability, and consumer protection in the evolving DeFi sector.
Malta Seeks Dedicated DAO Rules Under DeFi Laws
Malta’s regulator has proposed a new DAO category, potentially giving decentralized organizations clearer legal recognition.
Source: https://t.co/KKVwgKbUaV pic.twitter.com/9UYUtZ49JY
— ZebPay (@zebpay) June 19, 2026
Stay informed with the latest trends in Web3, blockchain innovation, and cybersecurity updates at 3verseTV
You need to login in order to Like
Leave a comment