Unchained Unconfirmed: Why Proposed FATF Rules Could Be a Shock for DeFi - Ep.225
Apr 2, 2021
Dave Jevans, CEO of CipherTrace and expert in blockchain analytics, delves into the FATF's proposed guidelines impacting DeFi and NFTs. He discusses how these regulations would force decentralized exchanges to implement KYC protocols, potentially changing user experiences. Jevans highlights the broader implications for NFTs and urges community engagement in shaping these rules. The show also touches on the crypto community's reactions and the importance of upcoming meetings for feedback on compliance challenges.
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FATF Draft Guidance Overview
- The Financial Action Task Force (FATF) draft guidance covers six main areas, including virtual assets, VASPs, stablecoins, P2P transactions, licensing, and information sharing.
- The biggest concern for DeFi is the expanded definition of a VASP, which could encompass many DeFi platforms and developers.
DeFi Developers as VASPs
- The FATF guidance might classify DeFi developers as VASPs if they profit from their platforms, directly or indirectly.
- This could subject them to regulations like KYC, sanctions screening, and the travel rule, similar to centralized exchanges.
DEXs and Centralized Exchanges
- The impact of the FATF guidance could make DEXs like Uniswap subject to similar compliance rules as centralized exchanges like Coinbase.
- Software providers of interfaces, however, are not subject to these proposed rules.