On the 16th of January 2025, the European Banking Authority and the European Securities and Markets Authority published a Joint Report on recent developments in crypto-assets. They found that EU adoption of DeFi is lower than other developed countries such as the US and South Korea, and that DeFi protocols pose significant risks of money laundering and terrorist financing (ML/TF). Moreover, lending, borrowing and staking of crypto-assets are offered by a number of crypto-asset service providers (CASPs) in EU jurisdictions which, in some cases, also provide regulated crypto-asset services. The EBA and ESMA observed limited engagement of EU consumers and financial institutions with crypto lending, borrowing and staking services, and warned that some users may receive insufficient information on the terms and conditions of these services in areas such as fees, interest rates paid or yields and changes to collateral requirements.
