FATF Report: DeFi Projects with Identifiable Controllers Should Be Regulated as VASPs

ChainCatcher report: In a report released on Tuesday, the Financial Action Task Force (FATF) stated that its rules already apply to DeFi arrangements if identifiable individuals retain "control or sufficient influence," regardless of how decentralized the project claims to be. FATF noted that many DeFi projects continue to exhibit centralized elements in practice, including concentrated governance tokens, managerial authority, upgrade control, and fees and rewards flowing to insiders. The report categorizes DeFi into three types: those with identifiable controllers, those that are de facto centralized but with hidden operators, and truly leaderless projects—only the last category is exempt from its standards. The report found that nearly 93% of jurisdictions responding to the survey have not yet applied these standards to any qualifying DeFi arrangements; among 142 jurisdictions, only 26 have assessed the risks, four have established licensing rules, and only two have registered or licensed related platforms. FATF calls on countries to require or encourage DeFi projects to embed anti-money laundering controls into smart contracts or interfaces; for platforms that refuse to cooperate, jurisdictions may prohibit their local operation as a last resort. The report also states that the total value locked in DeFi this year reached $86.6 billion, representing an approximately 85% increase from 2023.