A report published Monday said the Commodity Futures Trading Commission (CFTC), the U.S. regulator of futures, swaps and options contracts, wants policymakers to consider how to identify individuals involved in DeFi.
According to the report, policymakers need to identify and prioritize projects of greatest interest and focus on digital identity, know-your-customer (KYC) and anti-money laundering policies ( AML) as well as privacy corrections in DeFi.
Regulators are trying to address the perception among participants that DeFi is immune to regulatory scrutiny, especially due to the use of pseudonyms to hide user identities and its non-public nature. The concentration of the industry makes it very difficult to assign responsibility to a specific person.
“The anonymity and disintermediation offered by most DeFi systems raises serious concerns for policymakers focused on ensuring anti-money laundering and counter-terrorism financing regimes ( AML/CFT) is effective and provides appropriate consumer protections.”
Last June, the CFTC, which is competing with the U.S. Securities and Exchange Commission (SEC) to become the primary regulator of the cryptocurrency industry, won a lawsuit alleging that the autonomous organization was not Ooki DAO focuses on providing unregistered goods . By September, the CFTC sued three companies building some of the most important DeFi protocols for providing illegal derivatives trading. The companies were responsible for paying the fees.
Christy Goldsmith Romero, one of the five CFTC Commissioners and sponsor of the CFTC’s Technology Advisory Committee, whose subcommittee issued the report, said:
“The main concern regarding the DeFi system is the lack of clear lines of responsibility and accountability.”
“DeFi does not have a clear roadmap to ensure recourse for victims, protection against illegal mining, or the ability to introduce necessary changes and controls in times of crisis and stress. Straight up”.
The Financial Crimes Network (FinCEN) is also looking at ways to identify individuals active in decentralized finance and last week launched a beneficial ownership reporting system , requires many companies operating in the United States to say who directly or indirectly owns or controls them.
“In just one week, we received over 100,000 filings,” Yellen said at a private event on Monday.
