DeFi KYC: Not an issue as ‘99% have nothing to hide,’ industry execs say

DeFi execs astatine a WOW Summit sheet argued that implementing “Know Your Customer” (KYC) measures volition tackle the “biggest issue” successful decentralized concern (DeFi), which is hackers laundering millions of stolen funds into “clean money.”

During a sheet league astatine the World of Web3 Summit (WOW) successful Hong Kong connected March 29, titled ‘Blockchain Security to Smart Compliance: AML & KYC Solutions successful DeFi,’ manufacture leaders endorsed KYC successful DeFi arsenic a solution to tackle Anti-Money Laundering (AML) issues.

Dyma Budorin, CEO of astute declaration auditing steadfast Hacken, warned of the prevalence of tools readily disposable to hackers to “launder the money” stolen from DeFi platforms, which helium described arsenic the “biggest issue” successful the industry.

He explained that hackers tin easy bargain millions of dollars and launder the funds into assorted wallets – “to marque cleanable wealth again” – making it hard to way the root of the funds.

“KYC is astir transparency and accountability. I don’t deliberation it’s an contented for a bulk of people. I’m definite 99% of radical don’t person things to hide. I’m blessed to spot it arsenic portion of our world.”

However, Victor Yim, the Head of Fintech astatine Hong Kong’s incubator for entrepreneurship, Cyberport, suggested that KYC unsocial won’t lick each AML problems.

Yim explained that adjacent successful accepted finance, wherever KYC measures are prominent, “there is inactive wealth laundering happening each day.”

Blockchain Security to Smart Compliance : #AML & #KYC for #DeFi Path to compliance is : Now is the champion clip to beryllium that Defi tin beryllium unafraid and compliant @jessecogo from @Cointelegraph @buda_kyiv @tyyim Alexander Scheer @WOWsummitWorld pic.twitter.com/Lk5mnhMKDS

— Charu (@Charu_Sethi) March 29, 2023

However helium believes KYC measures volition marque a “better tomorrow” for the DeFi industry, noting that it volition necessitate a corporate effort – including “regulators, policy, bureau and different players” – to execute successfully.

Related: Binance launches interior probe pursuing KYC bypass rumors

Yim cited the conception “anonymous traceable,” arsenic an illustration of a equilibrium betwixt anonymity and compliance, arsenic individuals tin stay anonymous unless called upon by instrumentality enforcement – adding that it volition support the bully people, portion inactive getting the atrocious people.”

Alexander Scheer, laminitis of zkMe, emphasized that antithetic mechanisms should beryllium utilized for antithetic solutions, as crypto mixers, for example, “need to beryllium handled wholly differently” to DeFi front-ends and on-and-off ramps.

Scheer besides touched connected regulations, stating that the DeFi manufacture should proactively instrumentality the pb and “front run” regulations, earlier they are imposed by regulators.