Dear Executive Secretary Lewis,

On behalf of the Global DeFi Coalition and its members, ACCESS (Singapore), Bitcoin Association (Switzerland), Blockchain Association (United States), Blockchain for Europe (EU), CryptoUK (United Kingdom), and the International Association for Trusted Blockchain Applications (INATBA), we would like to reach out to you on behalf of our 350+ member companies and partners concerning the ongoing debates about the latest FATF guidance on a risk-based approach to virtual assets and virtual asset service providers and the potential implications for the Decentralised Finance (DeFi) sector.  

Representatives of the DeFi sector from all over the world came together in this initiative to support regulatory bodies in finding well-balanced approaches towards regulating the various actors in DeFi. To this end, we have formulated six principles that we encourage you to recognize when drafting recommendations that concern Decentralized Finance.

An effective mitigation of money-laundering risk and terrorist-financing risk in Decentralized Finance should be based on the insight that DeFi is qualitatively different from traditional finance as it lacks the financial intermediaries AML-regulation is usually attached to. While recognizing the gate-keepers to DeFi as financial intermediaries works well, risk mitigation for the financial activity that happens in between gate-keepers requires new paradigms to ensure society can enjoy the benefits of DeFi while simultaneously satisfying law enforcements’ needs. We therefore respectfully propose the following principles (attached) to guide the regulation of DeFi.

Thank you for considering this request and we are looking forward to your response. Our team is glad to get in touch with you and your colleagues to discuss any further details. 

Sincerely, on behalf of the Global DeFi Coalition

Luzius Meisser

Board member

Bitcoin Association Switzerland

Kristin Smith

Executive Director

Blockchain Association

Maria Minaricova

Chair of the Board

Blockchain for Europe

Robert W. Kopitsch

Secretary-General

Blockchain for Europe

Ian Taylor

Executive Director

CryptoUK 

Marc Taverner

Executive Director

INATBA

Anson Zeall

Chairman of the Board

ACCESS