News from Cointelegraph reveals that decentralized finance platforms in Europe may soon face new rules as the European Commission examines the industry. The Markets in Crypto-Assets (MiCA) framework mandates the European Commission to submit a report on Dec. 30, 2024, assessing the decentralized finance sector and considering specific regulations. The Commission spokesperson mentioned that various measures have been initiated in preparation for the report, including a study on embedded supervision, but no policy decisions have been finalized. The report will delve into how decentralized systems, especially those lacking a designated issuer or provider, should be governed. Key areas of focus include regulating crypto-asset lending and borrowing within DeFi. Potential new regulations have sparked concerns about the legal standing of certain crypto projects. There are worries that the rules could impose licensing requirements for DeFi interfaces such as decentralized exchanges. Experts like Nathan Catania from XReg Consulting believe that forthcoming DeFi regulations might encompass all non-fully decentralized applications, including DeFi frontends. Defining decentralization could significantly impact the extent of DeFi rules. In line with MiCA regulations, any entity offering services related to digital assets to third parties is classified as a Crypto-Asset Service Provider (CASP). These services include exchanges, transfers, and custodian wallets. Regulators are likely to consider whether professional services are provided when assessing the level of decentralization for DeFi applications. Factors like fee charging and fund control play a crucial role in determining licensing requirements. Another possibility for DeFi regulation could involve the Financial Action Task Force (FATF). They propose that individuals or entities exerting control over DeFi setups could be deemed Virtual Asset Service Providers (VASPs), even if the operations seem decentralized.