DeFi Exemptions

Definition ∞ DeFi exemptions refer to specific circumstances or entities within the decentralized finance ecosystem that may be excluded from certain regulatory requirements. These exemptions are often debated as regulators seek to apply traditional financial oversight to novel digital asset activities. The precise definition and application of these exemptions are subjects of ongoing legal and policy discussions.
Context ∞ The current debate surrounding DeFi exemptions is largely driven by the tension between innovation in decentralized finance and the need for consumer protection and financial stability. Regulators are examining how existing frameworks apply to DeFi protocols and whether carve-outs are necessary for certain decentralized operations.