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FATF DeFi Report Falls Short, Ava Labs General Counsel Says
Ava Labs general counsel Lee Schneider said the FATF failed to define decentralization, raising the risk that countries will over-regulate the sector.
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The Financial Action Task Force published a report on decentralized finance Wednesday. The report, which follows a broader update on virtual asset service providers, urges countries to take action against potential abuse in the sector.
The FATF standards apply to roughly 200 countries. Applying those rules to DeFi is the central challenge the report describes. Activity is concentrated in North America and Europe, which account for about 60% of global DeFi transactions, the report said. The Middle East and Africa together contribute less than 10%.
Lee Schneider, general counsel at Ava Labs, said the report fails on a basic question. It never defines "control or sufficient influence," Schneider wrote on X. He said the report also does not explain why certain forms of control should count as providing financial services.