Decentralised Finance: The case for a holistic approach to regulating the crypto industry

Since the launch of bitcoin in 2009, there have been fierce calls for the regulation of cryptocurrencies particularly linked with, amongst other things, their use to facilitate financial crime. One of the mechanisms deemed best to achieve this has been at the point of their intersection with mainstream finance – which is mostly through cryptocurrency exchanges and wallet providers which convert fiat currency to cryptocurrency and vice versa. The Financial Action Task Force (FATF) Recommendation 16 is expected to achieve this, however, this rule is only as strong as its robust implementation globally. The growth of decentralised finance (DeFi) further exacerbates the challenges of regulating the crypto industry, particularly as it is not covered by FATF Recommendation 16.