ESMA Proposes Regulated Service for Firms Offering DeFi Access

The European Securities and Markets Authority (ESMA) has recommended creating a regulated crypto-asset service for firms that connect users to decentralized finance protocols, bringing DeFi access into the EU’s crypto policy review.

ESMA submitted the recommendation Sept. 30 as part of the European Commission’s review of the Markets in Crypto-Assets Regulation (MiCA). It separately recommended proportionate requirements, including disclosures, for staking, lending and borrowing. The recommendations do not create legal requirements on their own.

The proposed service concerns firms that give users access to DeFi protocols. The disclosure recommendation addresses crypto activities, including lending and borrowing. Earlier European banking recommendations on crypto lending under MiCA are also part of the broader debate over how the law should cover newer services.

Lending vaults illustrate why those distinctions matter. A vault pools digital assets and deploys them through a defined strategy. Depositors receive share tokens representing proportional claims on its assets and returns. Some vaults allocate funds through code, while others involve people choosing strategies or moving assets.

In Morpho’s vault model, curators choose permitted markets and set risk boundaries and fees. Allocators then move funds within those limits. The roles provide one example of human decisions within a vault; vault designs vary.

The U.S. legal discussion concerns how existing securities law may apply to particular products. SEC Commissioner Hester M. Peirce said July 22 that vault management, strategy selection and reallocations may raise securities-law questions. “Vaults are not uniform,” Peirce said. Her statement addressed designs ranging from programmatic allocation to decisions directed by people; it did not announce an SEC rule or enforcement action.

Deposits in digital-asset lending vaults reached about $10 billion in Sept. 2026, compared with $1.5 billion in Sept. 2024. A recent risk framework for on-chain lending vaults examines credit, liquidity, curator, blockchain, protocol, security and governance risks. The assessment is neither a credit rating nor an evaluation of yield.

For vault operators, the U.S. securities-law question depends on each product’s design and activities. ESMA’s proposed DeFi access service and its separate activity-based requirements remain recommendations submitted for the Commission’s MiCA review.