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Are The Revised FATF Crypto Guidelines Targeted at DEXs?

The CEO of Ciphertrace (a crypto analytics company), Dave Jevans has alerted everyone who cares to know that supervisory bodies on finances are planning to ensure that centralized and decentralized exchanges obey the same rules. The consequence of this decision challenges the viability of this market as well as Defi platforms and protocols.

Laura Shin tweet. Source: Twitter

Is The FATF Updated Guidelines Targeted at DEXs?

The FATF recently released an update to its rules and regulations for all those involved in crypto.

In a reaction to the new update, Peter Van Valkenburgh said that the new updates can be likened to several unnecessary monitoring.

Van Valkenburgh, coin center’s research director further said that there are three major worries with these new guidelines. Customer counterparty identification, a critical inspection of peer-to-peer and privacy technologies, and oversight responsibilities for non-custodial firms.

Jevans supported Van Valkenburgh’s response saying that the FATF wants to expand the role of virtual asset service provider (VASPs). Hence, it would become necessary for more firms, especially non-custodial individuals to register with the local regulator, file and report details of their activities and other people’s activities.

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“In my opinion, the 79th point is the biggest, saying that regs will have to register with virtual asset service providers widens the scope and responsibilities for those VASPs. It doesn’t matter whether transaction fees are being paid directly or through the fluctuating price of a coin – any other similar services would also be regulated by a VASP. That means VASPs are more or less performing the role of Defi platforms. Hence, Defi platforms may no longer be needed.”

Summarily, DEXs and centralized exchanges would now have to obey the same rules and regulations. You would recall that DEXs’ unique selling point is based on account holders’ trading without the necessity of KYC compliance. While it is noble of the FATF to accept public comments on its newly released policies till the 20th of this month, they are in no way compelled to incorporate these feedbacks in their policy as Van Valkenburgh noted.

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Suppose these policies become acceptable and all relevant authorities across different countries impose these suggestions, what would be the fate of DEXs like Uniswap? Ultimately, the real meaning of decentralized is to be free from any central control, and in this case, it means no power should stop the operations of any DEX.

“BTC Isn’t Immune to New Regulations” – Jay Clayton

Up until now, the king coin hasn’t been subjected to any disruptive policies by America’s securities and exchange commission (SEC). But a former sec head (jay Clayton) has said that this might change pretty soon. Clayton while speaking in a recent interview said, “domestic and international regulation will be key drivers in determining the progress or end of virtual assets. Speaking as a citizen, I expect new policies to be put in place that addresses key issues regarding these digital assets, especially ones that concern taxation, security accounts, and banks maintain these assets. Once there are policies that address these areas and other key areas, there would be an evolution in this regulatory area.”

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Lately, there have been rumors that the central bank plans to ban bitcoin. In a brief interview with CNBC, billionaire asset manager, Ray Dalio opined that central banks would fight with all their might to guard the flow of money being supplied into circulation. He further said that the authorities would take forceful action when they feel that BTC has become too big.

Since late last month, BTC’s market cap hasn’t rescinded below the $1 trillion mark, while the beginning of this saw the rise of Defis’ total locked value to exceed $50 billion – something has never happened before now.

Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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