Cardano Foundation Pushes Back on New MiCA Rules for DeFi and Staking

The Cardano Foundation has urged the European Commission not to broaden the Markets in Crypto-Assets Regulation, or MiCA, with separate rules for decentralized finance, staking and other protocol-level activities. It said regulation should target functions and risks rather than technology. The foundation argued that Cardano holders who delegate ADA to help secure the network without giving up custody or locking tokens should be treated differently from staking services where a third party holds or manages client assets. It also called for keeping MiCA separate from traditional financial rules such as MiFID II, with an asset’s financial-instrument status based on substantive characteristics. It warned that complex new rules and high compliance costs could deter smaller projects and innovation in Europe.