Staking and DeFi solutions

Decentralised finance (DeFi) and staking protocols are transforming the crypto-finance landscape through interests, lending, liquidity pools and on-chain rehypothecation. These innovations are subject to increasing regulatory scrutiny, including the MiCA Regulation , crypto-asset service provider (CASP) status, AML/CFT frameworks, investor protection and rules governing collective investment schemes.

Failure to comply with these standards can obstruct a product launch, trigger enforcement actions from the ACPR or AMF and undermine user trust. Partnering with a law firm that possesses deep expertise in these fields is therefore vital to secure your crypto and DeFi yield-generating products.

ORWL’s expertise in supporting DeFi and yield projects

The ORWL team combines three complementary strengths:

Legal excellence: our lawyers come from capital markets, banking and digital practices and are well-versed in the positions of the AMF, ESMA and EBA.
Industry roots: we actively participate in industry-wide initiatives at ADAN, where our partner William O’Rorke serves as Secretary, contribute to European consultations and maintain regular dialogue with regulators.
Technological understanding: we have a thorough grasp of yield mechanisms, including liquid staking, restaking, tokenised real-world assets (RWA), lending and liquidity mining, alongside smart contract audits conducted via specialised partners.

Since 2018, we have advised a significant number of DeFi and staking protocols, ranging from multi-chain yield aggregators to staking-as-a-service solutions. Our approach prioritises clear language, operational deliverables and close coordination with product and compliance teams, from initial risk assessments to operational compliance.

The legal framework for supporting DeFi solutions

The regulation of yield and decentralised finance solutions is based on an analysis of substance, prioritising operational reality over theoretical intentions. This framework is built around three legal pillars and a multi-dimensional decentralisation test.

The regulatory triptych

MiCA Regulation: this is the reference text for crypto-asset services. Although fully decentralised protocols are excluded, any residual control results in crypto-asset services, such as swaps, custody or investment advice, being subject to CASP or token issuer status.
TradFi regimes (MiFID II / AIFM): the risk of reclassification is constant. MiFID applies as soon as a token replicates a financial instrument, while the AIFM regime governs any centralised collective investment scheme activity.
AML/CFT compliance: AML/CFT regulations apply as soon as a DeFi protocol or product is reclassified under the aforementioned regulations. Among these rules, the TFR and the Travel Rule impose rigorous traceability of on-chain and off-chain flows. Furthermore, the sanctions regime may be applicable even without the provision of an investment or crypto-asset service.

The technical and organisational reality test

Supervisors, such as the AMF and ACPR, evaluate projects on a decentralisation spectrum to identify DINO (Decentralised In Name Only) structures.

This reality test is based on three axes:

Technical: evaluation of the level of automation, the immutability of smart contracts and the absence of admin keys.
Operational: use of open source code, the non-custodial nature of assets and the reliability of oracles.
Governance: absence of an identifiable central authority and effective control by users over their assets and protocol decisions.

The firm maintains a permanent watch on ESMA guidelines, AMF positions and FATF work to anticipate supervisor expectations.

Our step-by-step support

Regulatory audit: flow mapping, qualification of services and analysis of risk zones.
Legal and strategic structuring: choice of jurisdiction, structuring the project entity and creating the contractual (T&Cs) and tax frameworks (VAT/Corporate tax).
Compliance and licences: obtaining licences, such as CASP or asset management, drafting MiCA-compliant white papers and developing AML, KYC and GDPR policies.
Post-launch follow-up: assistance in implementing regulatory changes, analysis of new services, regulatory monitoring and dedicated assistance for operational questions.

This method ensures sustainable compliance and limits costly post-deployment adjustments.

References and case studies

Securitization of a staking-as-a-service infrastructure

The Challenge

A staking infrastructure provider sought to validate its staking-as-a-service model while facing a risk of being reclassified under the MiCA regulation. The objective was to eliminate regulatory friction while maintaining an agile and user-friendly experience.

Our solution

Regulatory audit: Conducted a deep-dive analysis of fund flows and smart contracts to build a robust regulatory argument excluding the risk of reclassification under MiCA.
Product & marketing alignment: Collaborated with the product and marketing teams to implement operational best practices aligned with the non-regulated status.
Legal opinion: Delivered a Legal opinion to demonstrate service compliance to institutional partners and third parties.

Business Impact

Secured go-to-market: Successfully de-risked the project, allowing for a compliant and timely launch.
Institutional trust: Provided the critical regulatory pulse and reassurance required by banking partners and instituional clients.

Regulatory structuring and MiCA licensing for a DeFi lending protocol

The challenge

A lending project required a legal architecture to secure its activities under the MiCA and AMLD6 frameworks.

Our solution

We mapped activity-related obligations through flow analysis and structured the project into a dedicated ad-hoc entity. We led the operational compliance process to obtain the necessary licenses and structured both direct and indirect distribution schemes.

Business impact

We achieved a clear segregation between regulated and non-regulated activities, allowing the project to effectively target corporate and institutional actors.

FAQ – Compliance of staking and DeFi services

Is a staking or DeFi product always classified as a financial instrument?

Not necessarily. The legal characterisation depends on a substance over form analysis.

Key factors include the degree of decentralisation, the technical structuring of the service, the level of control exercised over user funds and the nature of the yield promise. This assessment is critical because crypto-assets that qualify as financial instruments are excluded from the scope of MiCA and remain subject to traditional financial regulations.

What are the estimated costs for a crypto-asset service provider (CASP) authorisation?

Legal fees for a full regulatory support typically range between €60,000 and €70,000. This estimate varies based on the complexity of the services provided and the geographical scope of the project. This investment ensures that the application meets the rigorous requirements for internal control, prudential safeguards and governance set by the competent authorities.

Is a staking product considered a crypto-asset service under MiCA?

It is considered a crypto-asset service if the product involves performing specific regulated activities on behalf of third parties. Providers must be particularly vigilant regarding functions that may trigger a classification as custody and administration of crypto-assets , reception and transmission of orders , or portfolio management.

Does the MiCA Regulation apply to decentralised autonomous organisations (DAOs)?

The regulation applies as soon as there is an identifiable legal or natural person performing essential functions or exercising control over the protocol. While services provided in a fully decentralised manner without any intermediary fall outside the scope of MiCA, any residual centralisation in issuance, reserve management or token promotion can trigger compliance obligations.

Is an external audit of smart contracts mandatory for regulatory applications?

While not explicitly mandated for every project, an external audit is highly recommended by experts and often expected by supervisors. It serves as a vital component of the mandatory risk management and internal control mechanisms. Furthermore, a successful audit strengthens the technical credibility of the case and enhances user protection against operational failures.

Can developers be held legally liable for an autonomous protocol?

Legal responsibility is a major point of discussion for regulators. The AMF suggests that liability could be distributed based on roles: those who develop, modify, or distribute the smart contract code may be held responsible for its proper functioning. Conversely, the community of users who decide on its management and modifications may be held responsible for its governance. Identifying “responsible persons” with control or sufficient influence remains a priority for authorities to maintain financial system integrity.

What is the current legal status of DAOs in France?

There is currently no dedicated legal framework or specific legal form for Decentralized Autonomous Organizations (DAOs). However, the regulator considers that DAOs must have an organized structure or designated representatives to manage civil and criminal liability, particularly concerning their users. This representation is also essential for conducting necessary interactions with public authorities and financial supervisors. Legal studies are currently ongoing to better define the modalities of legal representation for these organizations.

When does a DAO become subject to MiCA or AML/CFT regulations?

A DAO is not exempt from regulation simply by virtue of its decentralized label.

Under the MiCA regulation, compliance obligations are triggered as soon as an identifiable group executes essential functions, such as token issuance, reserve management, or token promotion. Furthermore, international standards from the FATF (GAFI) specify that creators, owners, or operators who maintain “sufficient influence” over a protocol can be qualified as crypto-asset service providers (CASPs). This classification requires the implementation of strict anti-money laundering protocols and the identification of participants to maintain the integrity of the financial system.