This article examines the rise of decentralised finance (DeFI), as a challenger to traditional financial (TradFi) systems, and explores some opportunities for regulators to play a foundational part in its development and growth. Tracing DeFI’s history from its cypherpunk roots through to today’s institutional interest in integrating elements of its ethos into traditional systems, this article examines the challenges financial regulators face. Key aspects of what makes DeFI novel- such as its pseudonymity, composability, immutability and its virtual nature, are the very aspects that pose significant challenges from a regulatory perspective. While its adoption by traditional financial market players continues to rise, it becomes inevitable for regulators globally to firm up their strategy on how best to address emerging risks. This calls for innovations in regulatory approaches to match the innovations that DeFi represents in the financial sector.