Malta Seeks Feedback on DeFi/DAO Rules Under MiCA Framework

The Malta Financial Services Authority (MFSA) has launched a public consultation to propose a dedicated legal framework for decentralized finance (DeFi), including how decentralized autonomous organizations (DAOs) and other 'software-governed' structures might be recognized under European rules.

The consultation, which opened on June 12 and runs until July 10, introduces the concept of a new category, 'software-based organizations', intended to capture entities whose governance is implemented through code or software logic. The MFSA suggests treating DAOs as part of this broader construct, separating governance from the technical operation of the underlying blockchain protocol.

The regulator argues that many DeFi projects still contain centralized elements, complicating claims of full decentralization and raising accountability questions. Malta's approach reflects a recurring compliance challenge in DeFi: regulators struggle to define how liability and oversight can be assigned when decentralized systems exhibit concentrated control or operational structures similar to centralized entities.