Malta Regulator Seeks Industry Feedback on Legal Framework for Software-Governed Organizations

Malta’s financial regulator is asking market participants to provide feedback on a proposed legal framework aimed at software-governed organizations, as it evaluates how such structures should be treated under law. According to Cointelegraph, the regulator argues that many decentralized finance (DeFi) projects are not fully decentralized, raising questions about accountability and oversight when governance is carried out through software. The regulator’s position centers on the view that the practical operation of numerous DeFi initiatives may involve identifiable control points or decision-makers, despite being presented as decentralized. By seeking industry input, the authority is signaling that it wants to shape rules that reflect how these organizations function in practice, particularly where governance mechanisms and responsibility may be unclear. The consultation indicates an effort to develop a legal approach that addresses software-based governance while considering the extent to which DeFi projects meet decentralization claims.