DeFi is Unlikely To Stay Entirely Permissionless, US Citizens Will Probably Be Felons For Bypassing Some Onchain KYC

First off I have to say, I ragequit Reddit for like over a year because of crypto reddit being so bad on this issue. I'm sure by now even redditors understand how truly dour the regulatory situation in the united states is for crypto. MiCa regulations in the EU will likely persue onchain Travel Rule too.

I see this as a capitulation of the core ethos of Ethereum to the national interests of EU and US.

That I am aware of the 6050i amendment to the Treasury IRS reporting that mandates protocols and nodes and validators and frontends to collect KYC, which was passed in 2021 has not been repealed in its SCOTUS appeal by CoinCenter, and they've been dead silent on it. This is set to go into effect on Jan 1st 2024 in a few months. It will make US citizens who don't comply with it felons.

But Recently the massive Market structure bill had a very near identical clause slipped into that will force intermediation. The UK fca commission just mandated Travel Rule implementation onto cryptobusinesses.

I of course was permenantly banned from r/cryptocurrency for repeatedly trying to bring up these issues. There are immense financial conflicts of interest in defi, VCs an dev teams in countries with permissive security law want to sell the industry out to KYC to save their own projects.

Now the absolute take away here, is that the technological means to stop DeFi aren't very strong, but if a usa citizen is genuinely going to be a felon for using it, with everything effectively being treated similar to TC, our adoption is pretty much finito.

I genuinely do not believe there will be major adoption of permissionless real DeFi if the usa goes through with full felonization and banking laws, it is just not plausible.