State of Crypto: How to Square Decentralized Finance With Regulatory Compliance

A discussion at D.C. Fintech Week explored the tension between decentralized finance (DeFi) and regulatory compliance, questioning if the two concepts are an oxymoron, especially given developer liability concerns raised by cases like those against Tornado Cash developers. Panelists, including Maha El Dimachki (BIS Innovation Hub), Yaya Fanusie (Aleo), and Lee Schneider (Ava Labs), generally agreed that developers can build compliance tools, provided there is a clear consensus on defining compliance. Fanusie framed developer obligations as "risk management," while Schneider noted that developers and regulators share the goal of preventing user losses. El Dimachki suggested outcome-based policymaking. The debate hinges on whether truly decentralized, open-source projects can meet jurisdiction-specific regulatory needs and the extent of developer liability when malicious actors use separate front-ends to interact with a protocol.

(Source：CoinDesk)