The Financial Action Task Force’s [FATF] recommendations on regulating cryptocurrencies has taken the crypto-community by storm. According to the released document, virtual asset service providers would be required to implement AML/CFT requirements, just like traditional financial institutions. The guidance was issued by the intergovernmental organization to bring about “financial transparency and setting expectations.”
This did not sit well with the community as prominent influencers of the space called out the released document which stated that a failure to enforce these ‘standards’ will lead to serious repercussions. Changpeng Zhao, CEO of the leading digital asset exchange, Binance, expressed his stance on the FATF regulations in the following tweet,
“I see many rules being made that on first glance seems to be against #crypto, but clearly by people who don’t understand crypto at all, and thus don’t consider the secondary effects, all of which actually will only accelerates crypto #adoption.”
He also stated that the best way to”fight” digital assets was to make fiat currency “more useable,” by imposing fewer restrictions and more freedom to the table. According to the CEO, the opposite scenario has been taking over the market.
With new regulations, the community speculates the potential rise of decentralized exchanges or DEX, platforms that are not owned by a single entity, but run on the collective power of network participants. Distributed across a number of diverse hosts, decentralized exchanges [DEX] are fairly immune to hacks.
DEX also lets users hold their own private keys, regardless of the state of the exchange, which is something that actually falls in line with the main idea of Bitcoin’s creation. Bitcoin was conceived with the idea to restrict government interference. The recent regulatory recommendation by FATF contradicts the very idea of cryptocurrencies.