How Does a Decentralized Exchange (DEX) Handle Privacy Coin Regulation?

DEXs, by their nature, are resistant to traditional regulatory pressure because they are governed by code and lack a central entity or jurisdiction. They generally do not implement KYC/AML checks, allowing users to trade privacy coins freely.

However, regulators are increasingly scrutinizing the developers and interface providers of DEXs, attempting to impose compliance requirements at the access layer.