KYC/AML shouldn't be subject to De-Fi platforms.
Owners and users are responsible for taking care of their assets, most especially on investing/buying other coins and tokens, or entrusting their funds easily on different platforms.
Topic: Will "De-Fi" platforms be subject to KYC/AML laws in the future? - page 3. (Read 408 times)
September 18, 2022, 09:12:58 AM
September 18, 2022, 08:59:21 AM
Depends on when they see it as a threat to the government and when other people will gonna use it for illegal activities. If not, they will leave it and concentrate on more important matters in the crypto industry and they will put some regulations regarding it. As of now they working on how they will gonna at least put some strict restrictions on the exchanges and others like mixers and crypto casinos so that they can have some huge amount of taxes and maybe they will go for De-Fi next time after it.
September 18, 2022, 08:54:26 AM
Most "DeFi" are non-custodial platforms in reality. The term is mostly used just for marketing nowadays. I can see a future where certain level of user information will be provided by these "defi" developers to tax authorities and money launderung investigators.
.... I'm afraid "De-Fi's" future is not as bright as many thought it would be.
Most defi users are also using centralized exchange so none of them would really care if that time comes. They are retail traders who thinks more about making quick profits than worrying about KYC. 
September 18, 2022, 08:48:21 AM
The front-ends of a DeFi product may or may not require AML/KYC depending on where they are located and/or what their principles are.
But that only matters so much. Anyone technically competent enough can operate with a DeFi protocol without needing the front-end. That's the entire point and beauty of it.
This was seen with the OFAC/Tornado cash thing if I understood it correctly. The front-end would censor transactions, but if you just interacted directly with the blockchain, you could go ahead and do so yourself. Because it's a blockchain.
But that only matters so much. Anyone technically competent enough can operate with a DeFi protocol without needing the front-end. That's the entire point and beauty of it.
This was seen with the OFAC/Tornado cash thing if I understood it correctly. The front-end would censor transactions, but if you just interacted directly with the blockchain, you could go ahead and do so yourself. Because it's a blockchain.
September 18, 2022, 08:45:24 AM
Forget about decentralisation peeps are so scared these days that they would pay extra bucks to have quality services and get more securities than just having LUNA like implosions as you said. Though defi getting its implications done for the true decentralised system it’s not worth it if millions of dollars are going to be stolen just like that without persons notification. These days exchangers like binance is more liked for the reason of safety, verifications like 2FA, liberty to have more chains than just one etc. Anyone would want to get services like that rather than DeFi. Though everyone has different mindset and outlook.
September 18, 2022, 07:50:51 AM
Regulations and decentralization don’t go hand in hand. If a platform is being regulated by an entity, then you can’t call it a decentralized platform. Decentralized means it is unregulated.
Can you regulate bitcoin? You cannot. Every transaction goes through no matter who makes it and everybody can create a transaction. That’s how decentralization works.
You can regulate the exchanges because you know their owners. Since nobody owns bitcoin’s blockchain, it is impossible to regulate bitcoin.
Can you regulate bitcoin? You cannot. Every transaction goes through no matter who makes it and everybody can create a transaction. That’s how decentralization works.
You can regulate the exchanges because you know their owners. Since nobody owns bitcoin’s blockchain, it is impossible to regulate bitcoin.
September 18, 2022, 07:46:33 AM
If so then its not defi anymore. Defi means decentralized finance and if kyc/amla have been introduced then there is an authority already. Yes we hate the fact that defi has been a ground for scammers and a lot losses money with such breach and exploitation happening on defi. What isnt nice here are those creating platforms to openly scam users. Well the government cant tolerate those scammers and wanted to jail them and hunt them.
DeFi projects are not truly decentralized if you count them with strict conditions. If you start a project and you doxed your identity, that project is never a truly decentralized project. Whatever you do with that, you are powerful person that can be caught by police, receive request to halt your project and so on. Bitcoin is really decentralized because the identity of Satoshi Nakamoto is unknown and the founder already intentionally left the community.Quote
As much as we wanted to retain the defi, then there is always scam projects ahead, and if we pursue a centralized regulations to those then we also breaking the definition of defi.
Scam exists everywhere and in many types. DeFi is one of types used by scammers but not all DeFi projects are scam. September 18, 2022, 07:42:12 AM
Dunno exactly, but there should be workarounds around that as you might be able to access these platforms with different frontends. After all, they can only censor frontend and not the smart contract itself.
That's quite incorrect, censoring on the smart contract level is possible and plausible.
If we take a look at Solend past histories, whereas there is passed governance that makes an attempt to take over someone's account, I don't think DeFi communities would fight back if they have government/authority pressure. So it is somewhat possible. I know it is too generalized, but if there is significant pressure, the developer and some community will likely just follow the regulation.
September 18, 2022, 02:43:30 AM
Government can regulate them because there is a way to regulate and if there is none, they can just ban them. It will happen if there isn't any innovation done to remove them from the way.
So many factors they can try to reach to make Defi comply like the CEO and the server of the defi platform. What I think defi need is a platform that we can install as app on phones or computers to make it more decentralized. But what will protect us from a platform that will likely scam us as well?
September 18, 2022, 01:43:30 AM
Will this be the future of "decentralized finance"? If not, why? Knowing that most people prefer convenience on top of decentralization, I'm afraid "De-Fi's" future is not as bright as many thought it would be. Your input will be greatly appreciated. Thanks in advance. 
There will always be future for the defi. To be honest almost all of defi were actually centralized finance. I think that people will always be falled into the word of defi. I think that if you are talking about how defi can exist in the crypto and it has proven if defi already exist since a few years ago but the question is whether the regulation will be hurting defi or not. This must become the main concern caused by regulators are always pushing defi to be compliance with regulation. Remember that some defi that already taken down by regulators in the past. that proves that if defi was not actually decentralized like what already mentioned.
September 18, 2022, 01:14:03 AM
Will this be the future of "decentralized finance"? If not, why? Knowing that most people prefer convenience on top of decentralization, I'm afraid "De-Fi's" future is not as bright as many thought it would be. Your input will be greatly appreciated. Thanks in advance.
If so then its not defi anymore. Defi means decentralized finance and if kyc/amla have been introduced then there is an authority already. Yes we hate the fact that defi has been a ground for scammers and a lot losses money with such breach and exploitation happening on defi. What isnt nice here are those creating platforms to openly scam users. Well the government cant tolerate those scammers and wanted to jail them and hunt them.As much as we wanted to retain the defi, then there is always scam projects ahead, and if we pursue a centralized regulations to those then we also breaking the definition of defi.
September 17, 2022, 11:27:58 PM
Dunno exactly, but there should be workarounds around that as you might be able to access these platforms with different frontends. After all, they can only censor frontend and not the smart contract itself.
September 17, 2022, 08:26:36 PM
Regulators have been paying close attention to the development of the "De-Fi" space, especially when the Terra/LUNA implosion left many investors "rekt" in the process. After the Tornado.Cash mixing protocol was sanctioned, the US' OFAC agency told American citizens would be able to withdraw their funds if they'd provide them with personally-identifiable information. That makes me wonder if "De-Fi" platforms would be required to comply with KYC/AML laws in order to prevent being shutdown for good (they are hosted on centralized servers anyways). I believe governments (especially the US government) will be on developers' tails to force them to make "De-Fi" platforms that are regulatory-compliant. If successful, every "decentralized" lending platform or even "decentralized" exchange would ask for users' identities, greatly undermining crypto/Blockchain tech's core value proposition (which is eliminating the middleman).
Will this be the future of "decentralized finance"? If not, why? Knowing that most people prefer convenience on top of decentralization, I'm afraid "De-Fi's" future is not as bright as many thought it would be. Your input will be greatly appreciated. Thanks in advance.
Will this be the future of "decentralized finance"? If not, why? Knowing that most people prefer convenience on top of decentralization, I'm afraid "De-Fi's" future is not as bright as many thought it would be. Your input will be greatly appreciated. Thanks in advance.
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