Ben Zhou: Regulators are preparing stricter oversight of the DeFi sector

The Decline of the "Wild West": Why DeFi Has Caught the Eyes of Authorities

On the sidelines of the largest forum, Paris Blockchain Week 2026, Bybit CEO Ben Zhou delivered a keynote address. He believes that the period of relative freedom for decentralized financial services is coming to an end. Regulators around the world are completing their preparatory phase and are preparing for a massive tightening of control over the DeFi segment.

Until recently, decentralized platforms remained in the shadow of their centralized competitors (CEXs). Zhou emphasized that this was no accident: authorities find it much easier to interact with organizations that are legally registered, headquartered, and have a transparent chain of command. In the case of DeFi protocols operating on smart contracts without physical offices, direct enforcement mechanisms were simply absent.

Institutional Trap: Classification Difficulties

One of the main problems of the current market remains the lack of clear terminology in legislation. Ben Zhou cited the European MiCA (Markets in Crypto-Assets) regulation as an example. Despite its ambitious nature, the document still does not contain an exhaustive definition of decentralized systems.

Key Barriers for Regulators:

1. Management Anonymity: Inability to issue an order to a specific person.
2. Technological Resilience: Smart contracts continue to execute as long as the blockchain is operational.
3. Global Reach: DeFi services are borderless, making national legislation ineffective without international cooperation.

The Future of the Market: Adaptation or Going Underground?

According to the CEO of Bybit, legislators won't tolerate "gray areas" for long. New KYC standards are expected to emerge in the coming years, even for decentralized liquidity pools. This forces developers to choose: either integrate compliance tools into protocol code or face blocking at the level of internet service providers and payment gateways.

The top manager is confident that tightened oversight will catalyze the maturation of the industry. Although this contradicts the original spirit of complete anonymity, such measures are necessary to attract large institutional capital to the sector, which requires security and legal protection.