Korea Institute of Finance urges AML rules for DeFi operators

I read it thinking there must be missing context in the original article, but...

The Korea Institute of Finance said, “For operators that support decentralization and over-the-counter (OTC) trading, rather than explicitly designating them as direct regulatory targets, it would be desirable to actively interpret virtual asset businesses to which AML/CFT regulations apply and impose related obligations.”

It added, “At the same time, given that for most operators supporting decentralization and OTC trading, regulatory jurisdiction is unclear and it is difficult for any particular country to exercise supervisory authority, it is necessary to classify such operators as unlicensed virtual asset businesses and actively utilize measures such as restricting transactions with operators that limit access by domestic users.”

They also raised the need to establish criteria for determining unreported offshore operators.

The Korea Institute of Finance said, “There is a need to present criteria that allow businesses and domestic users seeking to transact with offshore virtual asset operators to determine whether they are unreported operators, and to confirm to offshore operators wishing to do business with domestic users that they have a domestic reporting obligation, while at the same time preparing guidelines that domestic supervisory authorities can use as criteria to determine whether an operator is unreported.”

How will they manage the list of countless DeFi services, and in the first place, how do they plan to implement meaningful access/transaction restrictions on DeFi services? 😢

If the concern is about vulnerable groups being exposed to DeFi for the first time, I hope that, rather than slamming the door shut like this, the groundwork would be laid first with security guidelines and education on risks by service type.