Cryptocurrency

EU signals regulatory intent with study on ’embedded supervision’ of Ethereum DeFi

Circle Policy Advisor Patrick Hansen It tweeted details of a bid by the European Commission to develop “embedded oversight” for decentralized finance (DeFi) on the Ethereum network.

The purpose is to learn technology. Automatic monitoring monitoring function of his DeFi activity in real time.

The bid is estimated at €250,000 ($242,600) and the study is expected to take 15 months to complete.

EU wants to collect data on Ethereum DeFi

a contract notice Details of the study were announced on the EU website. We have sought a suitably qualified entity to initiate a pilot project to develop and test a technical solution for “embedded monitoring” of DeFi activity.

The notice acknowledges Ethereum as the DeFi protocol’s most important payment platform, and says it targets the “open nature” of blockchain data.

EU bureaucrats are pushing for real-time automated data collection of DeFi activity for “supervisory monitoring.”

“Its main focus is to collect automated monitoring data directly from the blockchain to test the technical capabilities of real-time DeFi activity monitoring.”

Hansen Technology resulting from this study will be “highly impactful” as it will make compliance oversight more effective and reduce the need for other participants to collect, verify and provide data to authorities. I commented that it is possible.

DeFi stands out from the rest of the cryptocurrency industry in that the software protocol does not have a single point of contact and cannot comply with existing know your customer (KYC) and anti-money laundering (AML) rules in the same way as CeFi platforms. present in the gray area outside the part. .

This is a problem for global regulators tasked with preventing the financial system from being abused for money laundering and other forms of financial crime.

But, as the recent “exposures” of Celsius users show, closing the web of financial criminals comes at the expense of legitimate users’ personal privacy.

EU Approves Crypto Regulation Bill

On 5 October, the EU the market of Crypto assets (MiCA) Bill, if passed into law, will create a comprehensive regulatory framework for digital assets in the region. Members of the European Parliament will vote on passing the bill on October 10th.

Interestingly, Section 12a The bill clarified its handling of DeFi by stating that “fully decentralized” services are outside the scope of regulation.

“Where’s the cipherassets The services defined in this regulation are provided in a fully decentralized manner. intermediaries who do not fall under Scope of this rule.

But DeFi’s technology for “built-in supervision” suggests that the EU still intends to monitor and oversee the sector.

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