FATF Says Most 'DeFi' Isn't Really Decentralized — And Wants to Regulate It. Here's What That Means

WHY IT MATTERS

Imagine a restaurant that calls itself a 'self-service buffet' but still has a chef deciding the menu, a manager setting prices, and a bouncer at the door. FATF is basically saying that many DeFi projects are like that restaurant — they call themselves decentralized, but real people are still making key decisions behind the scenes. FATF is a powerful global organization that sets anti-money laundering rules followed by over 200 countries. When they say something should be regulated, governments around the world tend to listen. For everyday crypto users, this could mean that many DeFi apps you use might eventually require identity verification (like showing your ID), similar to signing up for a bank account or a centralized exchange like Coinbase.