KYC/AML for decentralized finance – navigating the regulatory vacuum

With the increasing interest in DeFi protocols, I'm genuinely curious how institutions and sophisticated investors are squaring the circle on KYC/AML. While the underlying tech offers clear advantages, the lack of a central entity responsible for these checks seems like a massive hurdle for mainstream adoption, especially given the current regulatory climate. Are firms waiting for clearer guidance, or are there pragmatic workarounds being implemented that don't compromise compliance standards in other areas of their operations? It feels like we're in a bit of a holding pattern, and I'm keen to hear how others are approaching this fundamental challenge.