The right to privacy is constantly held in check by the need to counteract certain illegal conduct, so we are gradually getting used to giving up what would remain our right in the name of a presumed superior good; we see it with the anti-terrorism protocols, which for example in Italy require to fence off public event squares and search those who want to participate at the entrance, we see it daily in the world of cryptocurrencies where the right to privacy is opposed to the need to counter money laundering of money. Mediating between different needs is not always easy, indeed, most of the time it seems to be almost impossible, however at least when we talk about financial activities decentralized platforms come to our rescue. As many will know, in fact, the anti-money laundering regulations require us to keep track of every transaction carried out, together with the data of the payment provider, the beneficiary, the amount and the date; How can a DeFi platform come to our rescue by enabling both anti-money laundering transaction monitoring and user privacy protection? Simple, just use a decentralized network to identify users and then protect that data with encryption; in practice, a third platform manages the identification of the user, who can then authenticate himself on the various other financial platforms in a completely anonymous way and only in the case of an illicit be identified.

Let's take a practical example and imagine a trader who, as many do, operates on multiple platforms simultaneously; our trader will undergo the identification process only once, on a decentralized platform, transmitting all the documents required by the anti-money laundering legislation which will be protected by encryption. To our trader, therefore, an ID is assigned, impossible to be traced back to the natural person, with which to authenticate on the various platforms that, therefore, would be raised from the obligation to identify the customer since the collection of data and documents has already been made by a third party. Through the analysis of the IDs, therefore, it is possible to proceed to look for possible illicit behaviors and, once these should emerge, a smart contract will reveal the real identity of the ID after sending a specific mandate of a judge; there would therefore be a sort of POA protocol (acronym for proof of authority) which allows the judicial bodies to interact with the decentralized platform and order them to reveal the identity of a given ID. Once received the mandate and verified its validity, then, the smart contract will send to the judicial authority the data of the requested ID; in this way it is possible to guarantee everyone anonymity without ending with this by favoring money laundering or the financing of terrorism.