Significant regulatory moves that could change the landscape of the DeFi market have been spotted in both the US and Europe simultaneously! On September 30 (local time), the ADAPT Act, aimed at reforming virtual asset tax laws, was introduced in the US, while the European Securities and Markets Authority (ESMA) proposed creating a 'DeFi Gateway' category to regulate front-ends and routers—the entry points to DeFi.

The key takeaway from these regulatory actions is that instead of directly regulating smart contracts, they are focusing on tightly controlling the 'access points' that connect to the institutional system. The US ADAPT Act intends to raise tax standards for virtual assets to institutional financial levels by refining wash-sale regulations, and ESMA has proposed extremely strict guidelines that would effectively ban the trading and custody of non-compliant stablecoins.

This will likely lead to liquidity fragmentation, where the DeFi ecosystem splits into permissioned pools for institutions that have completed KYC and existing offshore pools. Institutional capital will only move through regulated, safe channels, effectively creating a massive 'regulatory wall.' We should closely watch how the standing of standardized stablecoins like USDC or EURC changes going forward. haha

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