- Bybit CEO Ben Zhou says DeFi enjoys a honeymoon as regulators lack a definition.
- EU MiCA has no clear DeFi definition leaving wide room for regulatory arbitrage now.
- Zhou compared DeFi’s current freedom to how crypto exchanges operated back in 2018.
Speaking at Paris Blockchain Week 2026, Bybit co-founder and CEO Ben Zhou did not mince words about where decentralised finance stands with global regulators. DeFi, he said, is enjoying a window that will not stay open forever, and the industry should not mistake silence from regulators for permanent acceptance.
“DeFi is currently in a regulatory honeymoon period,” Zhou said. “But regulators will figure it out, and when they do, decentralised exchanges will be the first target.”
Why Regulators Have Not Moved Yet
The reason DeFi has largely escaped formal oversight so far is not goodwill. Zhou pointed out that the cross-border and decentralised nature of DeFi sits in direct contradiction to how centralised regulation works. Regulators are built to oversee entities with offices, executives, and identifiable customers. DeFi, by design, has none of those things.
The EU’s MiCA framework, the most comprehensive crypto regulation passed to date, has not produced a working definition of what a DeFi protocol actually is. Most other jurisdictions are in the same position. That definitional gap is creating space for regulatory arbitrage, and the industry is using it.
“We have spoken to EU regulators and for them, DeFi is simply not on the agenda yet,” Zhou said. “There is not even a clear definition of what classifies as a DeFi protocol.”
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The Comparison That Should Make DeFi Pay Attention
Zhou drew a pointed parallel to where centralised exchanges stood in 2018, operating freely before KYC requirements arrived and permanently changed the landscape. CEXs today are subject to bank-level compliance reviews, transaction monitoring, and full identity verification on every deposit.
DEXs, by contrast, require nothing. No identity checks, no KYC, no compliance infrastructure whatsoever.
“At Bybit we hold banking-grade checks. We verify every single deposit, every KYC requirement,” Zhou said. “DEXs allow everyone in and do whatever they want. That will change.”
The Trigger Will Be Misuse
Zhou’s view is that the regulatory moment for DeFi will arrive not through proactive policy design but through a specific trigger: the point at which DEXs become visibly associated with money laundering, sanctions evasion, or large-scale illicit flows that regulators can no longer ignore.
The honeymoon, Zhou suggested, is not a permanent state. It is a gap between the speed of innovation and the speed of government, and that gap is closing.
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Source: https://coinedition.com/bybit-ceo-says-defi-is-living-in-a-regulatory-honeymoon/
