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Curve founder links FATF scrutiny to safer, more decentralized DeFi
Egorov’s comments came after the FATF’s July 21 report said regulators should assess “control or sufficient influence” in DeFi, not just whether protocols claim decentralization.
Curve Finance (CRV) founder Michael Egorov said regulatory pressure from the Financial Action Task Force could ultimately make decentralized finance protocols both safer and more decentralized, by reducing privileged access and strengthening protections around user funds, The Block reported.
In an interview, Egorov criticized how AML rules are being applied to DeFi, arguing that a protocol can make a stronger security case when it minimizes privileged access, removes upgrade risks, and eliminates the ability for any party to interfere with user funds.
Egorov’s remarks followed the FATF’s July 21 report on how anti-money laundering and counter-terrorist financing standards should apply to DeFi arrangements. The FATF framed the assessment around whether a person or entity has “control or sufficient influence” over a DeFi arrangement, rather than on whether the protocol is described as decentralized or relies on automated smart contracts.
The report said blockchain infrastructure, open-source software, and smart contracts alone do not determine whether AML/CFT requirements apply, and pointed to governance and operational factors such as the ability to change parameters, upgrade contracts, exercise administrative privileges, and control governance voting blocs.