A central distinction in the submission is between people who participate directly in a decentralized network and companies that provide financial services through an intermediary relationship. The foundation said regulators should focus on identifiable entities that perform regulated functions or exercise meaningful control over assets or transactions. It argued that general-purpose blockchain infrastructure, autonomous software and technical access to a network should not automatically be classified as regulated financial services.
The foundation said that protocol-level participation should be treated separately from commercial staking services in which an intermediary holds customer assets, controls private keys or manages assets at its discretion. Existing EU guidance likewise distinguishes direct staking from staking-as-a-service, which is tied to custody obligations under MiCA.
The submission also called for clearer boundaries between MiCA and other EU financial-services laws, including the rules governing financial instruments. It asked for more consistent treatment of hybrid tokens, stablecoins, environmental disclosures and cross-border ownership questions, warning that divergent national interpretations and overlapping requirements could increase compliance burdens, particularly for smaller businesses. The foundation also opposed dedicated regimes for NFT-related services, prediction markets, perpetual futures and crypto lending when existing laws can assess those activities by their economic and legal characteristics.
The proposal arrives as European regulators examine whether activities currently outside MiCA need additional oversight. ESMA has recommended proportionate requirements for staking, lending and borrowing, including disclosures about costs, risks, rewards, collateral and potential losses. It has also proposed clearer criteria for identifying genuinely decentralized activity and a new regulated crypto-asset service for firms that give users access to DeFi protocols. The European Commission is considering consultation responses before deciding whether legislative amendments are needed.