New guidelines for decentralized applications (DApps) has been issued by International Body Financial Task Fork (FATF). The implementation of the guideline could have consequences for DApp operators because it will affect the DeFI sector. Sushiswap, Uniswap and others are the operators the Defi is likely to affect.
Virtual Asset Service Providers are the entities that are involved with the Virtual Asset Service Providers (VASP).
However, part of the content of the guideline is that
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.
Gabriel Shapiro, an Attorney has stated the prospective consequences for the Blockchain industry, if the recommendations are executed. Shapiro said that ‘deploying and writinga smart contract is distinct from running a business with that smart contract.
Claiming that FATF recommendations could “wreak havoc” in venture finance and the blockchain industry if adopted, Shapiro added:
“a one-time sale of a VA makes you a money services business” thing has never made a lick of sense and seems inconsistent with FinCEN’s 2019 guidance.
Although FATF can only make recommendations or suggestions, these are internationally adopted by many regulators. Therefore, Shapiro believes they can have a real effect on the blockchain industry if u operators, i.e. Uniswap, are blacklisted by the body. Shapiro added: