DeFi faces criticism for denying user access based on wallet content
While decentralized finance (DeFi) is expected to be an upgrade to traditional finance mechanisms, some believe that denying users access to decentralized exchanges based on their wallets is a backward move.
In a tweet, entrepreneur Brad Mills criticized DeFi for denying users access to decentralized exchanges (DEXs) due to various factors such as location and wallet content. Because of this, Mills described the future of Web3 as a “surveillance panopticon” and said that it has rebuilt everything wrong with Wall Street but on a blockchain. Within the tweet, Mills also shared an image of a pop-up message from 1inch Network’s decentralized application (DApp) restricting access because of the wallet address used.
In a statement, Sergey Maslennikov, the chief communications officer at 1inch, told Cointelegraph that restricting wallets is part of their efforts to provide a safe and compliant community environment. Maslennikov explained that:
According to Maslennikov, the DeFi aggregator complies with all applicable sanctions and embargo lists. Apart from this, the DEX also follows anti-money laundering (AML) and terrorist financing prevention regulations, as well as efforts by the global community.
Related: Institutional crypto adoption requires robust analytics for money laundering
Meanwhile, the Financial Action Task Force (FATF) recently noted that countries that are ignoring the rules for crypto AML may be placed on the watchdog’s grey list, which is a list subject to increased monitoring. At the moment, there are 23 countries on the list, including crypto hubs like the United Arab Emirates and the Philippines.
In terms of terrorist financing, a United Nations (UN) official recently highlighted that terrorists still prefer
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