Regulators are coming for crypto: Is digital identity the answer?

The regulators are closing in. It’s one thing to unbundle market functions to their parts ― custody, aggregators and Prime Brokerage ― to satisfy institutional compliance departments. It’s another to keep regulators happy.

From the Financial Action Task Force pushing forward with its guidance for Travel Rule compliance to the still-evolving European Markets in Crypto-Assets regulatory framework, and the somewhat clumsily-handed U.S. infrastructure bill, the regulators are slowly tightening their noose, and I fear this may be the start of a multi-year staring match ― with the decentralized finance (DeFi) market now firmly in their sights, too.

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