The rapid advancement in decentralised finance (DeFi) has presented the world with both exciting opportunities and significant challenges to the global financial ecosystem. Issues such as security vulnerabilities, scalability constraints, and uncertain and still developing regulatory landscape impede its widespread adoption. This research study aims to explore the long-term sustainability of DeFi by thoroughly examining the security vulnerabilities associated with it along with understanding the scalability issues, particularly focusing on the risks associated with smart contracts, market manipulation, and network congestion. Our research demonstrates that these concerns significantly challenge the user confidence and reduce the overall reliability of the ecosystem, thus impeding its widespread adoption. Adopting qualitative research approach, we investigate the current and emerging regulatory frameworks in India, the United States, and the United Kingdom – three of the most prominent global economies – integrating the same with existing literatures, policy documents, and case examples to examine how different jurisdictions address DeFi risks in investor protection. We have also conducted comparative regulatory analysis discussing the implication of divergence for global adoption of DeFi. Our findings here suggest that while these regulatory approaches share similarities, they also differ in scope and focus within the DeFi landscape. This tension raises important questions about how regulations can strike a balance between ensuring safety and preserving the unique ethos of DeFi. We have also highlighted the practical implications of this research study such that identifying key risks and direct attention to areas where stronger security audits and governance mechanisms are needed. Finally, we propose to enhance DeFi adoption through effective regulation, which can move beyond speculative trading to support the integration of decentralised financial systems within traditional financial frameworks. Through this research, we aim to contribute to the existing body of literature on DeFi.