We Need Regulatory Clarity to Keep Crypto Exchanges Onshore and DeFi Permissionless

Subsequently, our framework requires strictly voluntary, not necessary, DEX registration to embrace the aggressive advantages of fast DEX growth with out prior restraint. DEXs that need to sign their compliance with the identical requirements as CEXs – for instance, via automated controls – can accomplish that with voluntary registration. However making registration non-obligatory permits for higher experimentation in client protections, as DEXs needn’t search pre-approval from inherently risk-averse regulators earlier than launching novel technical safeguards. As well as, voluntary registration avoids creating hostile choice, the place low pure boundaries to entry in an open-source software program ecosystem might enable rogue DEXs to achieve first mover benefits whereas compliance-oriented tasks are stalled by a regulatory approval course of.