DeFi Education Fund calls on UK FCA to narrow definition of control in crypto regulation

The Washington, D.C.-based DeFi Education Fund (DEF) has formally requested that the U.K.'s Financial Conduct Authority (FCA) adopt a narrow, functional definition of "control" when finalizing rules for crypto asset activities. DEF argues that regulatory obligations should only apply to entities possessing unilateral authority over user funds or transactions, such as the ability to initiate or block transactions, rather than sweeping in software developers who merely contribute to decentralized protocols without custody powers. The group supports the FCA's control-based approach in principle but insists it must be tied to concrete operational powers. Furthermore, DEF challenged the FCA's framing of DeFi-specific risks, noting that cybersecurity issues are not unique to blockchain and that public blockchains offer transparency advantages against illicit finance, concluding that centralized platform requirements are ill-suited for non-custodial, automated protocols.

(Source：CoinDesk)