ESMA Warns of 'Serious Risks' to Investors in Decentralized Finance, Promises Further Scrutiny

ESMA warned of "serious risks" to investors from decentralized finance (DeFi) in a new report.

ESMA promised further scrutiny of the nascent DeFi market, which poses challenges for regulators used to centralized entities.

Risks cited include volatility, anonymity enabling questionable behavior, and lack of a responsible party.

ESMA proposed new crypto asset rules under EU's Markets in Crypto Assets Regulation (MiCA).

Lobby group argues DeFi needs tailored approach, with programmers not liable just for realizing code could be misused.