CTRL/SHIFT - 13 06 2026 CHAPEL STAGE - ANJA BLAJ ZAJC - CHALLENGES OF THE CRYPTO ECOSYSTEM IN 2026

Hello. How's everybody doing? Hope you're fine cuz we're going to be talking about law and regulations. Right. So, I really wanted to cover just the key challenges.

Okay. Um and we're going to be starting with how we've grown so far. Um so, we really came to the point where we now have major banks launching the tokenization initiatives. Um there's stable coins issued by several different banks. There is institutional adoption.

Governments are exploring more and more and are trying to build the IPSE. Um and of course, there is regulatory frameworks emerging. But before we actually go into where we are today and what awaits us in the future, again, I want to speak about what happened in the past as well. So, hindsight 20/20. Um I don't know for how long you've been around, but early in 2010, maybe, people more or less just asked about what's the tax situation because they've made a lot of profit with mining.

Um and then came the ICO era in 2016, '17, and the DAOs, and early DeFi. People again made a lot of money. Taxes were still a question, but again, uh legal questions actually arose and they were more into how do we build legal entities that are going to be wrappers and what is even allowed? Am I allowed to issue an ICO? What's going to be a legal framework for that?

And we didn't really have a lot of questions as lawyers. So, people came to us with questions, is this is this legal? Do I have to leave Europe? And we were just saying, "Well, the regulators don't really have all the answers just yet." So, while I have the law, I'm not sure whether this is going to be a security, whether this is going to be a token, what's the legal status of a token?

And we went to the regulators and kindly asked for the regulatory frameworks to be built. But that wasn't just yet um a moment in time when this would be happening. But then there comes Libra with its project Diem. Maybe you remember it and they pitched that they're going to be banking the unbanked. And in Europe this may be a bit weird because we all have a lot of banks already.

And then came the institutional adoption so people began to understand that the ICOs and the whole blockchain actually has more and more value. And the biggest issues that we also seen in Europe at that time were perhaps the Terra Luna and FTX collapse along with for example all the Tornado Cash sanctions that followed and the issues that we had with developer. So all of that combined came towards the regulators and the regulators became more and more aware of how much they need to regulate the whole thing not just because they need to protect the consumers and investors but more or less to allow the banks and the institutions to join the space and start using technology. So where we are today we currently see a lot of regulatory fragmentation. We now have an environment where for example we have Mika in Europe and I'll talk about that a bit later on.

And we have similar things happening in the US and in the UK. The US and UK are approaching it a bit more softly so they're now creating guidelines. The US has for example the Genius Act and the Clarity Act may come. But I really want us to focus on Mika today because this is what's going to set the grounds for European future. So basically what happened with Mika is that it went for the risk-based regime where for example they would allow people to just go for one license in one jurisdiction and that would apply then through the passporting system in all the rest of the jurisdictions.

So before you had to go from one state to another and get their business and it was pretty costly. Today with Mika regulation you just go to one and this applies through the whole Europe. That's one thing. The other thing is basically the ending of the era of the wild west. So, what happened is that now we have definition of tokens, various tokens.

We also have a definition of who is a crypto asset service provider, and more importantly, we have definitions of stable coins. So, there's crypto assets and there's stable coins. The stable coins are categorized into e-money tokens and asset reference tokens. And I really want to make that distinction because I'm going to show some statistics um afterwards. So, basically, there's things that are covered with MiCA, but then there's also a couple of things that are left out.

And one of those is that we are not covering financial instruments. So, if a crypto asset currently resembles financial instruments, it is still regulated according to MiFID directive. This causes a couple of issues, and it's not very very clear in Europe um how the financial instruments, if they are crypto assets at the same time, are currently regulated. So, this is a left-out question that we will address afterwards. And then we fought pretty hard to also exclude the NFTs and the DeFi.

So, how DeFi is currently excluded is if the service is provided in a fully decentralized manner and without the intermediary, according to the recital 22 of MiCA, it falls out. Now, this begs the question, what actually is fully decentralized? But, all in all, we now have one regime. It's called the MiCA regulation, and it applies in Europe, and uh numbers are as follows. We now have 38 EMT issuers, so these are the e-money tokens, one of the stable coins, and zero whatsoever ARTs, which is the asset reference tokens, which is kind of sad to see because this is already applicable since 2024.

And then we have 174 CASPs. Perhaps the numbers are a bit bigger cuz this is a bit old. And then we also have 783 white papers submitted. So, these are the people that wanted their token to be traded on a market, or if they wanted to offer it such as ICO. More importantly, we also have a list of non-compliant entities.

Italy is actually among those countries that are putting a lot of entities on the non-compliant list. So, a bit of a timeline. We had MiCA adoption in 2023 and then the the rule started applying through 2024. Um and today we have full application. Actually, in July there's going to be even further application with all the CASPs.

Now, two important things that are actually now following are the MiCA review which is happening next year and before that happens European Commission normally comes up with a consultation paper which is where we are today. The European Commission basically issued a consultation paper on 20th of May and what they really want to achieve with that is to type in the industry, get some feedback and see whether they have done a correct whether they have covered enough things or whether we should regulate what MiCA has left out or whether things should change. So, the scope and definition, the stablecoins, CASP framework, those are all covered and for us what's even more important is that now regulators are asking what should be regulated beyond MiCA itself. So, to just cover a couple of things, what they're basically asking is for example the first question itself, should financial instruments that are crypto assets now still be regulated according to MiFID and other directives or should MiCA for example cover the whole thing? This is interesting because the directive as is is very fragmented so you don't have clarity in all different jurisdictions and you still have to kind of hop from one jurisdiction to another.

So, to some extent it may be better to actually have MiCA covering everything but this is a very very complex question. And then one of the things that may be also important is that regularity is now asking about prediction markets. So, perpetuals, prediction markets, those are the most novel instruments that we have and the regulator is scoping them in or at least is trying to see whether we should regulate those or not. Same goes for staking and lending and borrowing. This was left out so far, but the regulator is fully aware that these are perhaps the best activities currently um still there.

And then of course I mentioned recital 22, so fully decentralized services. We are still asking ourselves what that actually means. So, when it comes to that there has been a lot of tension. Um what true decentralization means, I don't think we even have some concrete answers when it comes to the industry itself. Um many times we were uh we saw that the regulators are actually seeing or trying to even regulate the interfaces.

So, again, whenever there is let's say a access control point or something like that, the regulator kind of wants to um regulate that access point. There's a lot of times that we saw um questions like that coming from EBA, which is the European Bank, um or the ESMA regulators. And of course the MiCA consultation now asks the same question. So, when it comes to the question of full decentralization, what may actually be important is what exactly they're asking for. They're currently putting together evaluation criteria and they're asking us if we agree that this is the evaluation criteria to recognize something as decentralized or not.

And among those criterias are whether you have admin keys, who holds them, whether the governance system is concentrated, to which extent. And for example, they're also asking about whether the protocol itself is open sourced and if there is an identifiable person that does marketing, which is interesting because they've done so in the past through the reverse solicitation guidelines. Now, DeFi in practice what I actually means is also that they're looking into what are the risks connected to DeFi. And then, very, very interesting as well, they're now trying to scope in the DeFi protocols and smart contracts to through establishing this sort of a certification process for protocols and smart contracts. What that means is that this was actually asked before.

We had data act on table, and the data act defined smart contract, and it had this um sort of things in article 36 when they were saying that, for example, the smart contract needs to be in such a way that it needs to have a function where you can stop it. So, basically, they wanted all developers to have this red button that you would press if something would go wrong. But, here we are basically seeing the same um regulator is trying to establish some sort of a certification for smart contracts or protocols so that they would they would allow CASPs, regulated entities such as exchanges, to then offer DeFi services only through certified protocols or certified smart contracts. This is not yet in the law. This is not yet the regulation.

This is only a public consultation, and whomever answers it, whatever answers the European Commission is going to get, this is now going to inform the regulator, and then they're going to decide whether they want to reopen MiCA and establish new rules, or should they actually just leave it out because it's good as is. Right. So, when it comes to how we again regulate the DeFi, there is I already mentioned a lot of times we see that people are interested in regulating the interfaces because this is where, for example, the consumer enters the DeFi. And then, application layer is very, very complex. There is lending, taxes, derivatives built on different types of smart smart contracts, and the smart contracts normally are governed with different keys.

So, they want to know how exactly this governance happens. And the infrastructure layer also kind of makes um a lot of relevance here. So, whether we know who the node operators are, who operates the bridge, all those questions are now still being asked. So, there's a bit of a difference between how different regulators approached. Before I showed the questions um that were posed by the French regulators, there's also Danish regulator and IOSCO, which is a international one.

And then one of the recent papers that came from the European uh Central Bank actually focused particularly on Aave, Maker DAO, um Ampleforth, and Uniswap. And what they did is basically they checked how concentrated these protocols are. Interestingly enough, they basically just took into consideration how many people have delegated their tokens to who, and they did an amazing job in identifying, for example, who the delegators are. What they haven't really made clear is whether delegators really hold the power to change the protocol itself or whether they're just proxies. And what they have also not made clear is whether, for example, the tokens that are held by the exchange are held um on behalf of their customers or only by the exchange itself.

So, all in all, it looked pretty bad because the numbers are very high, and it looks as if these protocols are extremely concentrated, but the reality may actually be a bit different. And this is basically where we come in as an institute. We are trying to get all these papers across, all the consultation papers, all the regulations before they make they're made um and passed in the parliament. And we're trying to inform the regulators and get as many feedback from the industry so that they are aware of where, for example, the regulation could be improved. Um right.

So, the ACPR, like the Danish, um have also been trying to figure out how we um define the decentralization and what exactly is the issue here. So, one of the things was still um whether there is a legal status for DAO, whether blockchain infrastructure standards are needed. And one thing that we are really trying to achieve more often is that regulators are not thinking strictly of the law and the regulations, but are rather trying to introduce sandboxes or safe harbors. So, this is a software approach where for example, the regulator just says, here we have the environment, it's a sandbox and you can come and ask the regulators if this is actually a correct way of doing it and we won't apply the the laws and regulations so strictly. Um right.

So, we have the Rec 16 22, which is still a friction. We don't yet have fully definition full definition of what decentralization is and here is where we ask the industry to kind of help us out and go through the evaluation criteria, see whether there's something that they haven't thought of and whether we would actually like them to think of something else. Um why where else there is also friction is with the fact of travel rule, which applies to all West, but non-custodial architecture actually doesn't have any obliged entities to comply with. And then there's also the friction with other regulations such as Dora for example, which presents the risk management and third-party obligations and also assumes the identifiable service providers, which again in DeFi and fully decentralized is not really the case normally. Same goes for interfaces for the AML regulation and whenever we are trying to get the KYC across.

Um and as well the legal status of the DAOs. So, some considerations for the DeFi. Um we are normally trying to establish what is the entry criteria, whether this is really going to be sufficient if for example, somebody just enters into the user interface. And here we are trying to establish better thresholds and also say to the regulators to establish the safe harbors. So, instead of applying the laws and demanding for example, that all these providers have the full license.

We are normally trying to achieve that they just go with less disclose and make sure that those disclosures are software only provided to the right regulators and not publicly available cuz whomever holds the keys or whomever is in control of something specific, that name should probably not be public cuz these people also need to protect their families. And we are trying to establish um the differentiation when it comes to regulating the DeFi between the interfaces, the infrastructure, the protocol layer, and what is there, who has control. So, this is where we are at. What we are trying to achieve is either there is no action whatsoever and people regulators are not going to reopen Mika at all. And then the second maybe that there's a softer approach where for example we only get the guidance from the regulators.

And then the third approach would be where for example the regulator actually establishes that DeFi would need to be regulated because we need a better protection of investors and or consumers and we end up with having a new legislative proposal on our table. So, this is where we are at. Um I don't know if I mentioned that the feedback is now open until 31st of August. So, summer is going to be extremely fun for policy makers, for advocacy groups, and people like us. Um we need all the help from lawyers, from builders, from whomever touches DeFi, from whomever actually knows how this is going to be impacting their business if it's going to be regulated.

And for that purpose we're establishing a DeFi working group. Um it's going to be announced on Monday as well because we're holding a forum there with the policy makers in Berlin. Um and if you're interested, just reach out over Telegram, LinkedIn, email, whichever works. Um we're going to be having probably weekly calls before the 31st of August. We also heard that the European Commission is evaluating only based on the numbers.

So, the more feedbacks they get, the the better it's going to look. But, we're still going to probably do two things. We're going to go and ask everyone to submit theirs, but there's also going to be a jointly submission where we're going to dive into details and explain how we want things to be regulated further. Thank you so much.