(SeaPRwire) –
By: Adrian Kingsley
The European Union is preparing to extend its crypto market rules deeper into technology that was designed to operate without middlemen. The Cardano Foundation just filed its objections. This is not a minor compliance complaint. It is a direct challenge to a regulatory instinct that has been growing stronger in Brussels for months.
The Cardano Foundation submitted a 19-page formal response to the European Commission on September 30, 2026. Its position was published publicly on October 21. Senior Legal Counsel Benjamin Buergi drew a clear line. Regulators should focus on parties that manage assets or control transactions. That is the proper boundary. Everything else is overreach.
Cardano’s staking model lets ADA holders delegate tokens to help secure the network. Users do not lock their funds. They do not surrender custody. The Foundation argues this is fundamentally different from managed staking services offered by centralized platforms. A recent review of Ethereum staking activity confirms this distinction. Custodians and pooled providers occupy a very different legal space than participants in a permissionless delegation model.
ESMA responded with its own set of proposals. The regulator wants new safeguards for staking and lending activities. It also wants a regulated service category created for firms that simply provide access to DeFi protocols. This is where the Cardano Foundation objects most strongly. It argues that providing software or access to a network should not automatically trigger the same duties as managing customer assets. The logic behind that objection deserves close attention.
The Foundation’s filing asks regulators to examine one question: does an identifiable operator perform financial services or control customer funds? If the answer is no, then traditional financial regulation does not apply. This is an activity-based approach. ESMA’s approach is a technology-targeting strategy. These two frameworks cannot coexist comfortably. One treats code as infrastructure. The other treats code as a regulated entity.
NFTs feature prominently in this filing as well. The Foundation wants the EU to retain exemptions for genuinely unique non-fungible tokens. Membership in a collection should not alone make an NFT subject to rules designed for interchangeable tokens. This is a narrow but important distinction. It matters for artists, collectors, and platforms that have built entire product lines around unique digital assets. Stablecoins receive similar treatment. The Foundation supports clear boundaries between crypto regulations and payments legislation. It wants those boundaries drawn carefully, not swept aside by broad interpretations.
EU supervision of USDC will increase after regulators classified the token for closer oversight. The Foundation acknowledges this development but wants consistency across member states. It also pushes for environmental disclosures that actually reflect the differences between blockchain systems. Not all networks consume energy the same way. A one-size-fits-all reporting standard would obscure those differences.
France is moving separately on taxation. Lawmakers backed a proposed tax on crypto-to-stablecoin swaps. That measure is still undergoing further steps. It raises national taxation questions rather than the MiCA boundary issues the Foundation is trying to resolve at the EU level. The two tracks may eventually intersect. They are not currently aligned.
The European Commission has not decided whether to expand MiCA following its consultation. Officials must assess responses like Cardano’s before deciding whether to propose changes or clarify how existing laws apply to decentralized activities. The filing the Foundation made is part of a consultation process. It is not a final decision point. But it is a signal. The Foundation said it will continue working with EU policymakers. Any future proposal would need to clarify how regulators treat direct staking, managed crypto services, and other blockchain activities across the bloc.
The tension here is structural. EU regulators have shown a consistent pattern of seeking additional safeguards whenever decentralized finance grows beyond simple exchanges. Each new proposal extends supervisory reach. Cardano’s response draws a boundary and challenges the Commission to justify crossing it. The outcome will shape how every permissionless protocol operating in Europe defines its compliance strategy going forward.
Author bio: Adrian Kingsley is an internationally renowned scholar who has long studied public administration and social policy, with a focus on digital governance and regulatory architecture in the European Union.