DeFi platforms such as Axiom and Hyperliquid present themselves as “permissionless infrastructure,” yet in practice they function as highly profitable trading venues for leveraged derivatives and cross-chain swaps, serving EU retail users at scale. Under MiCA and existing EU securities law, these are not unregulated parallel universes. They are crypto-asset service providers – or even MiFID II investment firms – operating without the required licenses. The real scandal today is not only the regulatory gap in MiCA’s treatment of “pure” DeFi, but the ongoing failure of EU supervisors to use the powers they already have.
1. DeFi – A Regulatory Definition, Not a Branding Trick
EU regulators now use a fairly convergent working definition of DeFi: a system of financial applications built on public blockchains that replicate traditional-finance functions (trading, lending, derivatives, asset management) via smart contracts and often “open, permissionless” access (Source: ESMA).
MiCA itself is entity-based: it applies to natural or legal persons issuing crypto-assets or providing crypto-asset services, including when parts of the activity are executed in a decentralised way. Only arrangements that are fully decentralised with no intermediary fall clearly outside MiCA’s current scope – and MiCA explicitly recognises this as a future policy problem, not a free-for-all (Source: ESMA, EuroFi).
French and EU policy papers reinforce the principle “same activity, same risks, same rules”: DeFi smart contracts may not be regulated as such, but the people who design, deploy, control front-ends, market the product, or share in the fees can be classified as regulated service providers (DASP/CASP or investment firms) on a case-by-case basis (Source: Banque de France).
In other words: calling yourself “DeFi” does not put you into a regulatory void. It simply shifts the spotlight to who is actually in control.
2. Axiom & Hyperliquid: DeFi Labels, Centralised Economics
Axiom is marketed as a decentralised trading terminal on Solana offering spot swaps, cross-chain trading, yield products and 20x-leveraged perpetuals, with 4.3 million monthly visitors and double-digit millions in monthly revenue (Source CoinGecko). Its own documentation shows tight integration with Hyperliquid to route swaps and perpetuals trading (Source: CoinGecko).
Hyperliquid, in turn, has become the dominant on-chain perps venue: since launch it has processed around $2.5 trillion in cumulative perp volume and now captures roughly 80% of the decentralised perps market, with daily volumes above $8 billion (Source: 21shares). Independent research and marketing materials highlight no KYC, access from over 180 countries, including EU states, and leverage up to 40x – with restrictions only for the US, Ontario and a few sanctioned jurisdictions (Source: datawallet, CoinPerps, CryptoNews).
Read our Axiom Compliance Report 2025 here.
FinTelegram’s own compliance tests from within the EU (Italy and Austria) confirmed that Hyperliquid accepts deposits and allows trading of perpetual futures – MiFID II financial instruments – without identification, geo-blocking or EU perimeter controls.
Functionally, both platforms look far less like autonomous protocols and far more like profit-seeking trading businesses with teams, front-ends, fee models and roadmaps.
3. Why These Platforms Are Already Inside the EU Perimeter
From a MiCA / MiFID perspective, several points are clear:
- Crypto-asset services (CASPs). MiCA Title V covers services such as operating a trading platform, executing orders, exchanging crypto against fiat/crypto, and providing custody. EU regulators (e.g. the AMF) stress that any firm offering these services to EU clients after 30 December 2024 needs CASP authorisation, subject to limited national grandfathering (Source: DL News, AMF, ESMA).
- Derivatives = MiFID II, not just MiCA. Perpetual futures on BTC, ETH, SOL and similar crypto-assets are derivatives within MiFID II’s definition. ESMA and legal commentary are clear that derivatives on crypto fall under existing securities law when offered via trading venues or investment firms (Source: eur-lex.europa).
- Targeting EU users. Data sources and marketing collateral around Hyperliquid explicitly talk about access “across Europe” with no KYC,datawallet.com+1 while Axiom advertises itself to global retail as an “all-in-one trading platform” with email and wallet sign-up and no visible EU-specific restrictions (Source: CoinGecko).
Under this lens, DeFi front-ends such as Axiom – and potentially the entities behind Hyperliquid’s web interface and governance – are not outside the law. They are very plausible CASPs and/or investment firms actively providing services in the Union without authorisation.
4. Does MiCA Effectively Address DeFi – Or Just Pretend To?
To be fair, MiCA 1.0 was never designed as a full DeFi statute. The Regulation openly acknowledges that fully decentralised arrangements fall outside its scope and mandates an Article 142 review on DeFi and staking by 2025 (Source: ESMA).
The EBA/ESMA DeFi report notes that DeFi still represents a limited share of the overall crypto market but flags significant consumer and integrity risks, recommending that policymakers consider further tools – including extending entity-based regimes to DeFi “gateways” and intermediaries (Source: ESMA).
So the honest answer is nuanced:
- For pure, protocol-only DeFi with no identifiable operator, MiCA is incomplete and will likely need a Phase-2 regime.
- For Axiom-style terminals and Hyperliquid-style exchanges with real teams, fee capture, product roadmaps and marketing, MiCA + MiFID II already provide enough legal hooks. What is missing is not law – it is enforcement.
5. Regulatory Inertia: A Growing DeFi Enforcement Deficit
Since mid-2024, MiCA’s stablecoin rules are live and CASP rules apply from 30 December 2024, with only limited transitional regimes for existing, law-compliant providers (Source: BancadItalia). Yet DeFi perps venues and gateways continue to move multi-billion volumes with EU retail users, while most national regulators restrict themselves to generic warnings about “crypto volatility.”
From a FinTelegram perspective, this looks increasingly like regulatory negligence:
- Supervisors have repeatedly endorsed “same activity, same rules” for DeFi.
- They know that Axiom-style platforms and Hyperliquid perps are accessible from their jurisdictions and that these products fall within MiCA / MiFID risk perimeter.
- Yet we see no MiCA-based public warnings, no cross-border cease-and-desist orders, no visible coordination – precisely the gap DeFi players are exploiting.
The message to the market is dangerous: call yourself “DeFi,” put your servers somewhere offshore, avoid KYC – and Europe will look the other way.
MiCA has been fully applicable since 30 December 2024. BaFin has “name-and-warn” powers under KMAG. ESMA maintains a register of non-compliant providers. The EBA explicitly warns that “CASPs or issuers operating without regulatory approval pose several ML/TF risks.”
Why, then, are EU regulators watching billions flow through unlicensed channels without taking enforcement action? This inaction normalizes regulatory circumvention, exposes EU retail investors to unprotected risk, creates competitive disadvantage for compliant CASPs, and undermines MiCA’s credibility before it has established regulatory authority.
6. Call for Information
FinTelegram will continue to investigate the DeFi enforcement gap in the EU, with a focus on Axiom, Hyperliquid and their on- and off-ramp partners. We invite insiders, developers, compliance staff and affected traders to share documents, internal policies, geo-blocking evidence or correspondence with regulators via our whistleblower platform Whistle42. Your information can help clarify who really controls these “decentralised” gateways – and why EU regulators are still failing to act under MiCA.
