ESMA Highlights Need for Monitoring Complex DeFi Smart Contracts!

The post ESMA Highlights Need for Monitoring Complex DeFi Smart Contracts! appeared first on Coinpedia Fintech News

The European Securities and Markets Authority (ESMA) has released a paper on “Decentralisation Finance: A Categorisation of Smart Contracts” proposing that regulators need to understand and monitor the complexity, fragility, and contagion of smart contracts within DeFi. Although the forthcoming Markets in Crypto-assets (MiCA) regulation does not directly oversee DeFi platforms, ESMA has emphasized the importance of appreciating the interdependence of smart contracts that rely on one another. The authority has been keeping a close eye on developments in blockchain and cryptocurrency and recently highlighted that crypto-assets present significant risks to investors, with fraud and market manipulation being among the key threats.