Mike Novogratz tweeted yesterday and addressed DeFi protocols concerning their compliance with the governmental rules.
He stated that some DeFi protocols are at the verge of choosing between complying with the law or cutting the corners. Which is true. That is, some DeFi protocols are unwilling to implement the Anti-Money-Laundering and Know-Your-Customer checks for their users.
Mike discouraged them from “flipping the middle finger at the law” because they will pay the piper later.
He further buttressed his argument with the fact that several governments of the world are standing akimbo looking at the latest developments of DeFi. Therefore, he said it’s not smart of anyone to think the government won’t have the tools to check the compliance of every DeFi protocol with the law.
On a further note, Mike Novogratz quipped that the only way for DeFi to grow was through a good corporation with laid down rules of the society.
Having said this, there are several rebuttals to his tweet. Some commenters noted that KYC and other government-placed checks really do not prevent crime. Moreover, it’s costly for both users and corporations. Thus unnecessary and impedimental.
At this juncture, one thing is sure: DeFi protocols need to be diplomatic and smart in harnessing the need for their users’ privacy and compliance with the government regulations.