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How Does the Rise of DeFi Challenge Traditional KYC Procedures?

DeFi's permissionless, pseudonymous nature lacks a central entity to perform identity checks, creating a regulatory compliance gap.
Greeks.Live16.11.25

How Does the Rise of DeFi Challenge Traditional KYC Procedures?

The rise of Decentralized Finance (DeFi) challenges traditional KYC because DeFi protocols are often permissionless, non-custodial, and pseudonymous, lacking a central entity to perform identity verification. This clashes with the regulatory requirement for financial intermediaries to conduct KYC/AML, creating a compliance gap for decentralized protocols and raising concerns about illicit fund flows.

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