Cardano Foundation Urges EU to Keep MiCA Rules Off DeFi, Staking

The Cardano Foundation is urging European Union policymakers to avoid creating a fresh, stand-alone regulatory regime specifically for decentralized finance (DeFi) and staking. In a submission to the European Commission, the foundation argues that lawmakers should apply existing financial rules based on what an activity actually does and what risks it creates—rather than classifying the activity according to the underlying technology. In a 19-page response posted Wednesday, the foundation also draws a line between users who directly participate in decentralized networks and intermediaries that package services around custody, asset control, or other forms of managed exposure. The distinction, it says, matters for how obligations under EU law should be structured. Key takeaways The Cardano Foundation says DeFi and staking should be regulated by activity and risk, not by the technology used to deliver them. It calls for clearer separation between direct user participation and intermediary services, especially those involving custody or control of user assets. The submission warns that poorly aligned rules between MiCA and existing financial legislation could create uncertainty for crypto businesses operating across EU member states. Its position aligns with broader EU deliberations about expanding oversight for staking, lending/borrowing, and certain DeFi-related access services. Substance over structure in EU crypto oversight At the center of the Cardano Foundation’s argument is a principle it says EU regulators should adopt: regulation should follow the “substance of an activity,” including the functions performed and the risks created, instead of focusing on whether the activity is conducted through decentralized infrastructure. In its response, the foundation emphasizes that not all crypto participation is equivalent from a legal and risk perspective. While decentralized networks enable users to participate directly, other models involve intermediaries that may manage keys, provide custody, or exercise control over users’ funds. According to the foundation, these two categories should not be treated identically. The foundation’s stance also implicitly challenges a one-size-fits-all approach. If EU rules are written around “DeFi” as a label, the foundation argues, they risk capturing fundamentally different behaviors under the same regulatory umbrella—an outcome it believes would increase compliance complexity without necessarily improving consumer or market protection. Delegation on Cardano vs. intermediary staking services The submission highlights delegation as a concrete example of how the EU could distinguish between decentralized user involvement and intermediary-run services. The Cardano Foundation states that Cardano users can delegate native ADA tokens to help secure the network without surrendering custody or locking their tokens. On that basis, it argues that this type of participation should be treated differently from staking services operated by intermediaries, where users may not retain the same level of control or custody. The distinction matters because EU regulatory obligations often become stricter when providers take custody, control assets, or manage key operational components on behalf of users.