French authorities want crypto exchanges to check DeFi protocols and face liability for certain customer losses under proposed changes to EU crypto rules. The plan would place new compliance duties on exchanges that give customers access to decentralized finance.
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French authorities have proposed that crypto exchanges conduct checks on DeFi protocols and face liability for certain customer losses, according to a Cointelegraph report published on Oct. 21, 2026. The measure is framed as part of proposed changes to European Union crypto rules. The described approach targets exchanges that offer customers access to DeFi, rather than the protocols alone. That would place the compliance relationship at the point where many users first encounter decentralized finance.
Under the proposal as described, an exchange would need to assess DeFi protocols before offering access and could bear responsibility for specified customer losses. This would change the exchange’s role from a purely technical access provider into a gatekeeper for the protocols it connects to customers. It contrasts with a common DeFi model in which users interact directly with smart contracts and are expected to manage protocol risk themselves. The practical effect would depend on how EU lawmakers define the checks and the liability standard.
The proposal comes against the backdrop of the EU’s Markets in Crypto-Assets regulation, known as MiCA, which sets licensing and conduct rules for crypto-asset service providers. MiCA was built around identifiable intermediaries, while many DeFi protocols operate through smart contracts and decentralized governance. By attaching obligations to exchanges, French authorities could extend regulatory reach to DeFi activity without regulating each protocol directly. This makes centralized access points a key focus for EU crypto policy.
Crypto exchanges are already subject to registration, licensing, and conduct requirements in many jurisdictions, giving regulators a clear entity to supervise. DeFi protocols often lack a single legal entity or formal management structure, which makes direct enforcement more difficult. Placing checks and liability on exchanges could therefore create a compliance gateway through which DeFi services reach retail users. The proposal reflects a broader regulatory preference for using intermediaries to reach decentralized activity.
French authorities want crypto exchanges to conduct checks on DeFi protocols and to face liability for certain customer losses under proposed changes to EU crypto rules. The proposal focuses on exchanges that offer customers access to DeFi, rather than on the protocols alone.
DeFi protocols often operate without a central intermediary, while EU crypto rules are largely built around licensed crypto-asset service providers. By placing duties on exchanges, the proposal could extend regulatory reach to DeFi through the access points that many users rely on. This could affect how exchanges offer DeFi-related services.
No, the measure is described as a proposed change to EU crypto rules, not a finalized law. The source does not specify the final text, timing, or whether the proposal will be adopted as drafted. Further EU legislative steps would be required before any rule takes effect.
France Targets Exchange-Level Checks on DeFi
How the Liability Model Would Shift Risk
The EU Crypto Rule Context
Why Exchanges Are the Regulatory Access Point
Open Questions Before Any Final Rule
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Several core terms in the proposal still require definition, including which customer losses would trigger exchange liability and what constitutes an adequate check on a DeFi protocol. The source does not specify whether the obligations would apply to all DeFi protocols, only those made available by an exchange, or particular categories of products. Clarity on those points would determine how exchanges structure their DeFi offerings and how responsibility is divided among exchanges, protocol developers, and users. As a proposed change to EU rules, the plan would also need to move through the EU legislative process before taking effect.
MiCA is the EU’s Markets in Crypto-Assets regulation, which establishes licensing and conduct rules for crypto-asset service providers. It is relevant because the French proposal seeks to extend regulatory obligations to DeFi access through exchanges, an area that sits less neatly within MiCA’s intermediary-based framework. This helps explain why exchanges are the proposed compliance target.
The source does not define which customer losses would trigger exchange liability, what specific checks exchanges would need to perform, or how responsibility would be shared with DeFi protocols. Those definitions would be central to how the proposal affects exchanges, protocol developers, and users. They would likely be addressed in any final legislative text.
