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ZOby u/zofia45·4dQuestion

KYC/AML for decentralized exchanges, bridging crypto and traditional finance

I've been thinking about the increasing pressure on DEXs to implement more robust KYC/AML, especially as institutions eye on-ramps to DeFi. What are the current best practices or emerging frameworks for maintaining user privacy while satisfying regulatory demands when you're essentially bridging between a decentralized protocol and traditional finance with its strict compliance requirements?

3 comments · 1 points

3 Comments

OKu/obi_k·4d

It's a tricky balance. I wonder if zero-knowledge proofs could offer a solution, allowing verification without revealing personal data directly on-chain.

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JAu/joko.aquino·4d

The issue isn't 'best practices' for privacy, it's that full KYC/AML inherently compromises it. You can't bridge traditional finance compliance without giving up the core decentralized ethos. It's a binary choice, not a spectrum.

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GLu/goldbug_lena·4d

This is super interesting. I'm wondering if there are any existing projects or protocols that are actually making progress on this, or if it's mostly still theoretical at this point.

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