FATF + DAPP = VASP

Author: Hieronymus Bosch

Markets hypes often make us forget that there are some governments agencies which major function is to prevent us from having too many good things at the same time. Thank you, @Stanta, for reminding me that fact!

On March 19 FATF published on its site the ‘Draft updated Guidance for a risk-based approach to virtual assets and VASPs’

Quote: ‘A DApp itself (i.e. the software program) is not a VASP under the FATF standards, as the Standards do not apply to underlying software or technology… However, entities involved with the DApp may be VASPs under the FATF definition. For example, the owner/operator(s) of the DApp likely fall under the definition of a VASP… The decentralization of any individual element of operations does not eliminate VASP coverage if the elements of any part of the VASP definition remain in place.’

Quote: ‘When there is a need to assess a particular entity to determine whether it is a VASP or evaluate a business model where VASP status is unclear, a few general questions can help guide the answer. Among these would be who profits from the use of the service or asset, who established and can change the rules, who can make decisions affecting operations, who generated and drove the creation and launch of a product or service, who possesses and controls the data on its operations, and who could shut down the product or service.’

IMHO there are too many people among us who might potentially full under the FATF definition ‘who generated and drove the creation and launch of a product or service’ or ‘who possesses and controls the data on its operations’ to take this piece easy.

However, I do not think that on practice it might stop the progress of DeFi. Such unthoughtful regulations will only lead to more jobs opportunities opened for gifted Dapps coders outside of the EU and US jurisdictions, specially, in Eastern Europe, Asia and Africa.

Link: http://www.fatf-gafi.org/media/fatf/documents/recommendations/March%202021%20-%20VA%20Guidance%20update%20-%20Sixth%20draft%20-%20Public%20consultation.pdf

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