Definitely, but there is still a huge demand for KYC-free services. You can tell as much by the way Binance operates: They are willing to segregate their markets rather than go fully compliant. It's also basically a given that a host of countries won't be complying with the FATF travel rule, leaving the door open to non-compliant exchanges.
I don't think it will be possible for any exchange to have two separate regulations guiding their operations. They will have only two choices in future, either they will comply with the local law which will be formed as per the recommendations given by FATF or they will go out of business or forcefully closed by the governing country.
It's a lot more complicated than that. People are overestimating the effectiveness of the FATF. Some of the countries where exchanges are registered today -- like Seychelles -- are already not compliant with FATF rules. The notion of Seychelles implementing the Travel Rule anytime this decade is a joke. There are dozens and dozens of countries like this:
FATF rules aren't accepted all around the world. Even within the EU some countries do not participate in this "project" so it's not the end of the world yet.
Very true. I was initially under the impression that compliance was pretty widespread. It's the opposite really. Many dozens of monitored countries fail to implement the majority of FATF rules. This is decades after these standards were initially put in place. Often times, a mere pledge by a country to work towards implementing
some of the standards is enough to stave off FATF pressure for years.
The elephant in the room is how many problems this will create for users of non-compliant services. If BitMEX refuses to comply -- especially because Seychelles is unlikely to pass related laws anytime soon -- will BitMEX users have problems cashing their bitcoins out at exchanges like Coinbase?
