If you are using Defi, you probably cannot avoid regulations. There are many Defi projects. However, many platforms require an on-boarding process similar to Cefi.
Most frequently used regulations
KYC and AML are the most two common regulations.
What is KYC?
Know Your Customer requires service providers to make an effort to verify the identity of customers.
What is AML?
Anti-money Laundering requires service providers to know where the source of money comes from.
Less common requirements
Depends on the investment risks, service providers may want to clarify customers’ income information or proof of accredited investors in order to take more risks on their products.
Cefi onboarding process
When you open a bank account in any financial institution, they will be required to verify the user through photo identification issued by the government, user address, identification number, birthday, or any other unique identification combination. They will also ask your source of income,
Defi runs on Cefi Exchange
Most of Defi products are on the Cefi marketplace. Exchanges like Binance will require KYC and AML for users to deposit and trade.
Cefi invests in Defi
Institutional investors can also invest Defi since the processes are similar to Cefi. Therefore, possible institutional investors will invest more in the future.
Likely all Defi will run on top of Cefi Exchange
Defi runs on Cefi Exchange will be the norm and regulators will require exchanges to comply with regulations.
In conclusion
Pure Defi may not exist and a combination of Cefi and Defi will continue evolving into the new financial services.
Photo by Matheus Viana on Unsplash
Related articles to reference here ⬇️⬇️:
-------------------------------------------------------------------------------------
Stablecoin
Stablecoin is Not So Stable
Stablecoin: We Ever Need Them More Than CBDCs
-------------------------------------------------------------------------------------
CBDC
CBDC: Stablecoin 2.0 or Stablecoin Killer
Chinese CBDC: the Ultimate Financial Weapon or Just another Copycat
CBDC vs Cryptocurrency: the War of Privacy
Game of Three Kingdoms: CBDC vs. Cryptocurrency vs. TechCoin
Why Crypto Got So Political Suddenly: The Beginning Tale of Government Crypto Surveillance Program
CBDC's Cross Border Payments System: Worse than Crypto
-------------------------------------------------------------------------------------
Defi
DeFi Swap: Great Returns come with Great Cost
Defi: A Rainbow 5-Layers Cake
Robot Sucks: How Lousy Jobs AMMs Did to Ruin the DeFi
-------------------------------------------------------------------------------------
Defi Manual
Defi Manual: Part 1 - Cefi vs. Defi
-------------------------------------------------------------------------------------
Inflation
Inflation vs. Bitcoin: How Speculation to Hedge Inflation has Failed in Short Term but may Create Opportunity in Long Term
Hypothetically, What if the Fed Fails to Control Inflation, Will Crypto Save Us?!
Currency Debasement: Cryptocurrency Inflation Hedge Hypothesis Still Hold
-------------------------------------------------------------------------------------
Gold
Gold vs. Bitcoin: Digital Twin or Enemy
-------------------------------------------------------------------------------------
Volatility
Volatility of Bitcoin: Threat or Opportunity
-------------------------------------------------------------------------------------
Recent News
Lesson Learn from Robinhood IPO: Era of Crypto Exchange Comes to an End or a New Beginning?
City Coins: Are they the Era of New Coins?
The End of Era for Crypto Exchange Platform?!
Crypto Hacking: How Did it Really Happen?
Jack Dorsey’s Ambitious: Twitter wants to Become a Place of Freedom of Speech
Legendary Hacker: the White Hat into the Rescue
The Future of Cardano: as Clear or as Uncleared?
Patent the Blockchain: the Nonsense Action Shows a Worry from Big Tech Companies
Forget about Trade War: New Era of the International Trade
Epic Games vs. Apple: Tech Companies Crypto Adoption May Begin
Litecoin Fake News: How Fake it is?
-------------------------------------------------------------------------------------
China FUD
China FUD: Are We Done Yet?
Bitcoin Mining Recover?! The Chinese vs. The U.S Strategy of Blockchain
Red Alert: Lesson Learns from the Nearly Cashless Nation
-------------------------------------------------------------------------------------
SEC FUD
SEC vs. Ripple: the Endless Game of War
SEC vs. Defi: What is the goal of the Defi?
The SEC Defi Investigation: The Decentralization Theater
Coinbase Regulation Probe: The Future of Crypto Lending
-------------------------------------------------------------------------------------
NFT FUD
NFT: Digital Solution or Delusion?
NFT: The Future of Gamers' Assets
NFT Bubble: Does it Really Matter ?!
NFT Bubble May Just Almost Pop
-------------------------------------------------------------------------------------
Miscellaneous
Where are We Position Crypto at : the Problem with Money and Wealth
What Categories Does Bitcoin Belong to or Does it Really Matter?
Quantum Financial System: The System Lost Itself in Quantum World
Crypto Hot Hub: The Best Place to become Crypto Incubator
Break the Fourth Wall?!
We Are Short for the Dollars: The Dollar's Liquidity Issue
Fiat vs. Crypto: Religion vs. Science or Vice Versa
-------------------------------------------------------------------------------------
Bitcoin Digest
Is Bitcoin Untraceable Anymore?! It Depends!
Currency Comparison: Bitcoin vs Dollar
Bitcoin ETF May Not Be Such a Great Idea
Bitcoin Lightning Network Explain
-------------------------------------------------------------------------------------
Ethereum Digest
Ethereum London Hardfork: How Hard does It Actually Fork?
Did the U.S. government just thumbs up on Bitcoin and down on Ethereum after the London Hardfork?
EIP-1559: The Future of Ethereum Economy
Ethereum Got Update Bug: A Blockchain Synchronization Problem
Buterin's Regret: Ethereum 8 Co-Founder Things
Can Cardano Really Kill Ethereum?!
Cardano is Smoking or Vision the Future
-------------------------------------------------------------------------------------
Shitcoin Economy
The Legendary of Shitcoin: Meme to the 🌓 or Unique of 💎 or Simply just 💩
Crypto Economy: the Untold Speculative Financial System We will Live?
Shitcoin Economy: Part 1 - Category
Shitcoin Economy: Part 2 - Regulations
Shitcoin Economy: Part 3 - Environment
Shitcoin Economy: Part 4 - Technology
Shitcoin Economy: Part 5 - Detokenization
-------------------------------------------------------------------------------------
Doge Economy
Doge 2.0: Who Let The Dog Out?!
Dogecoin 2.0: Doge Breeder Era
-------------------------------------------------------------------------------------
Energy FUD
Bitcoin's Energy Concerns, Scalability and the End of Bitcoin Prediction
Unknown Author’s Hypothesis: Creator of PoW and PoS Hybrid Blockchain
-------------------------------------------------------------------------------------
Tokenoconomy
Tokenism: An Old Idea Get A New Invention
-------------------------------------------------------------------------------------
Crypto-regulation
Legal Framework of Virtual Currency
The Cantillon Effect: The 18th Monetary Curse About to be Broken
-------------------------------------------------------------------------------------
Machine War
Artificial Intelligence vs. Blockchain: the Future of Machine War
Crypto War I: Birth of Public Key Cryptography
Crypto War II: Birth of Decentralized System
-------------------------------------------------------------------------------------
Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.
