Lets talk about recent FATF guideline


The FATF has drafted a regulatory proposal to be released this June. This guideline includes regulations on DEX, Defi, and Dapps.

This is the problem part.

  1. Exchange or transfer services may also occur through so-called decentralized exchanges or platforms. “Decentralized or distributed application (DApp),” for example, is a term that refers to a software program that operates on a P2P network of computers running a blockchain protocol—a type of distributed public ledger that allows the development of other applications. These applications or platforms are often run on a distributed ledger but still usually have a central party with some measure of involvement, such as creating and launching an asset, setting parameters, holding an administrative “key” or collecting fees. Often, a DApp user must pay a fee to the DApp, which is commonly paid in VAs, for the ultimate benefit of the owner/operator/developer/community in order to develop/run/maintain the software. DApps can facilitate or conduct the exchange or transfer of VAs.

  2. A DApp itself (i.e. the software program) is not a VASP under the FATF standards, as the Standards do not apply to underlying software or technology (see below). However, entities involved with the DApp may be VASPs under the FATF definition. For example, the owner/operator(s) of the DApp likely fall under the definition of a VASP, as they are conducting the exchange or transfer of VAs as a business on behalf of a customer. The owner/operator is likely to be a VASP, even if other parties play a role in the service or portions of the process are automated. Likewise, a person that conducts business development for a DApp may be a VASP when they engage as a business in facilitating or conducting the activities previously described on behalf of another natural or legal person. The decentralization of any individual element of operations does not eliminate VASP coverage if the elements of any part of the VASP definition remain in place.

  3. Other common VA services or business models may also constitute exchange or transfer activities based on items (i), (ii), and (iii) of the VASP definition, and the natural or legal persons behind such services or models would therefore be VASPs if they conduct or facilitate the activity as a business on behalf of another person. These can include:

a) VA escrow services, including services involving smart contract technology, that VA buyers use to send or transfer fiat currency in exchange for VAs, when the entity providing the service has custody over the funds;

b) brokerage services that facilitate the issuance and trading of VAs on behalf of a natural or legal person’s customers;

c) order-book exchange services, which bring together orders for buyers and sellers, typically by enabling users to find counterparties, discover prices, and trade, potentially through the use of a matching engine that matches the buy and sell orders from users (although a platform which is a pure-matching service for buyers and sellers of VAs and does not undertake any of the services in the definition of a VASP would not be a VASP); and

d) advanced trading services, which may allow users to access more sophisticated trading techniques, such as trading on margin or algorithm-based trading.

  1. The determination of whether a service provider meets the definition of a VASP should take into account the lifecycle of products and services. Launching a service that will provide VASP services, for instance, does not relieve a provider of VASP obligations, even if those functions will proceed automatically in the future, especially but not exclusively if the provider will continue to collect fees or realize profits, regardless of whether the profits are direct gains or indirect. The use of an automated process such as a smart contract to carry out VASP functions does not relieve the controlling party of responsibility for VASP obligations. For purposes of determining VASP status, launching a self-propelling infrastructure to offer VASP services is the same as offering them, and similarly commissioning others to build the elements of an infrastructure, is the same as building them.

So, regardless of whether governance is decentralized or transactions are automated, if there is anyone who benefits from fees while operating DEX, it is VASP.

I think the trading fee that pay to the DAO will cause a problem. The FATF stated that even if the community, not a corporation, earns profit, it is also considered a VASP, so I guess the Bisq DAO also applies.

This is a draft, but if considering the case two years ago, it will be adopted with little or no modification.

What are your thoughts on this? Should Bisq’s trading system change?

If one have learned one thing last year with all these stupid plandemic rules, then it would be this:

How should that be enforced?

It can’t.

Therefore this is just scaremongering, fearporn or whatever you want to call it…

Protect users privacy as much as possible.

Yes - https://bisq.community/t/is-trader-chat-saved/10539/16