The French Prudential Supervision and Resolution Authority (ACPR) has sparked mixed reaction in the Decentralized Finance (DeFi) sector after they proposed to treat DeFi’s web interfaces, such as applications and webpages, as financial intermediaries. This implies that they would need to comply with various regulations, including Know Your Customer (KYC) policies and standards that control access to their services.

ACPR, which is under the country’s financial regulating authority of the Central Bank of France, has set out to protect users and especially newcomers to the field, by making it contingent on the customer’s financial literacy and risk appetite. Despite the intentions being noble, several members of the industry have aired their discontent on this regulation, as they feel like the requirements proposed are too harsh for interface operators.

The US lawmakers have also opted to avail similar regulations; in which they have classified cryptocurrency validators and miners as ‘brokers’, compared to the more traditional financial players. This generates a range of reporting and security obligations, which have been argued as impossible to fulfill due to lack of adequate data. Bearing in mind this state of affairs, a bipartisan congressional group led by House Financial Services Committee Chair Patrick McHenry, and comprising of Rep. Ritchie Torres and Majority Whip Tom Emmer has reintroduced the Keep Innovation in America Act. This act seeks to expand the definition of a ‘broker’ to include any person willing to effect digital asset sale at the direction of their customer, for consideration.

For now, ACPR is content with listening to feedback from individuals and firms in the European continent, in order to discover if their proposal is appropriate, or if it needs to be adjusted further. They have set a deadline for receiving feedbacks, until May 19th. For now, the industry is still divided on their opinion on the proposed regulation, but ACPR has made it clear that their primary goal is to ensure consumers are as safe as possible.



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