Key facts
- Aave Labs submitted a response to the UK FCA's cryptoasset perimeter consultation.
- Aave argues that non-discretionary decentralized finance infrastructure should not be treated as financial intermediaries.
- The company advocates for a regulatory approach that distinguishes DeFi protocols from traditional intermediaries.
Aave Labs, a key contributor to the Aave decentralized finance protocol, has formally responded to the UK Financial Conduct Authority's (FCA) consultation on the cryptoasset perimeter. The submission argues that the regulatory framework should differentiate between decentralized finance (DeFi) protocols and traditional financial intermediaries. Aave's position is that non-discretionary infrastructure, which forms the backbone of many DeFi applications, does not engage in the kind of discretionary activities typically associated with intermediaries and therefore warrants a distinct regulatory treatment. This distinction, Aave suggests, would allow for more appropriate and innovation-friendly regulation of the DeFi sector.