ESMA Pushes for DeFi Regulation and Stricter Oversight in EU

The European Securities and Markets Authority (ESMA) is advocating for new regulatory frameworks for DeFi and tokenized securities to enhance investor protection and anti-money laundering (AML) enforcement. ESMA seeks clearer criteria to define "genuinely decentralized" activities and recommends a dedicated framework for firms providing access to DeFi protocols. The regulator also requested expanded supervisory powers to deactivate fraudulent websites and freeze funds linked to AML violations, aligning with broader EU efforts to establish a comprehensive crypto regulatory regime by 2027.