Coinbase: UK's Proposed Crypto Rules Could Effectively Block Regulated Platforms from Accessing DeFi

Odaily reports: Katie Harries, Head of European Policy at Coinbase, wrote that the UK Financial Conduct Authority (FCA)'s proposed crypto asset regulatory rules could require regulated platforms to execute client orders only on FCA-authorized trading venues, thereby restricting users from accessing decentralized finance (DeFi) protocols through compliant platforms. Since decentralized protocols typically have no entity that can apply for regulatory authorization, the proposed rules could prevent regulated platforms from offering DeFi access services, constituting a de facto ban. The relevant crypto regulatory regime is expected to take effect on October 25, 2027.

Harries argues that a blanket restriction on DeFi access will not eliminate the activity but may instead push more transactions into channels that regulators cannot effectively monitor. She calls on the FCA to adopt an approach of "regulating the access point, not blocking the technology," allowing compliant platforms to offer DeFi access services provided they clearly disclose risks to users, obtain user consent, and assess protocol operational and governance risks. She also noted that the EU and the US are exploring the integration of traditional finance with DeFi infrastructure, and the UK should also preserve space for such innovation. (Cointelegraph)