DeFi Regulatory Developments In France: AMF Publishes Summary Of Responses On DeFi Regulatory Approach

The Autorité des Marchés Financiers (AMF), the financial markets regulator in France, has published a summary report on the regulatory issues surrounding decentralized finance (DeFi). The AMF has published the feedback it received from respondent to its initial discussion paper in 2023 on the topic regulating this emerging ecosystem.

Key highlights include the following:

• Defining DeFi: Respondents emphasized the importance of clearly defining DeFi and distinguishing it from permissioned or permissionless blockchain protocols. The degree of decentralization is a key factor. Providing criteria to quantify the notion of decentralization is important because levels can vary across projects. Factors such as automation, network architecture, lack of single points of failure, and governance could be considered. Overall, there is a desire for an examination of the criteria that would allow for determining the level of control exercised over a protocol.