Per Woofun AI, the Malta Financial Services Authority (MFSA) has published a discussion paper outlining strategies to integrate decentralized finance services into the European Union’s Crypto Assets Market Regulation (MiCA). The document scrutinizes governance structures and accountability mechanisms, challenging the notion of 'fully decentralized' systems that lack intermediaries.

The MFSA highlights that numerous DeFi protocols retain centralized characteristics, including administrator keys, upgradeable smart contracts, and controlled user interfaces. Consequently, the authority advises regulated entities to conduct comprehensive smart contract audits and risk assessments prior to integration. Stakeholders may submit public feedback on the proposal until July 10.