DeFi Receives Heavy Criticism After A User Gets Kicked Out

DeFi Receives an Entrepreneur’s Criticism

An acclaimed entrepreneur namely, Brad Mills commented that it is wrong to suggest that decentralized finance (DeFi) has re-developed everything afresh.

Instead, he used strong words against DeFi in suggesting that for Wall Street, in particular, DeFi has re-developed anything hardly.

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Denying Access – A Retrograde Action

It is said that DeFi has brought evolution into traditional finance, however, there have been many instances where innovation has been criticized.

For instance, refusal to allow a user to use or utilize decentralized exchanges purely because of their digital wallets is regarded as a ‘retrograde’ action.

In a tweet post, DeFi received strong criticism from Brad Mills because the entrepreneur noted the denial of access to users.

Mills noted that in decentralized exchanges users are often denied access for various reasons and the content of a digital wallet is one amongst many.

Web3’s Future

For this very reason, Mills claimed that Web3’s future will not be more than just ‘surveillance’. He suggested that Web3 may be an inventor to many yet its innovations are entirely wrong mainly with Wall Street.

In his tweet message, Mills also posted a snapshot of the pop-up window containing a user message telling the user that DApp has denied access.

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DApp, which belongs to 1inch Network, restricted a user’s access when the app noted that the user was using a different wallet address.

Denying of Access Is Not ‘Unusual’

After the incident, Cointelegraph did an interview with 1inch Network’s senior executive, Sergey Maslennikov. The executive told Cointelegraph that there was nothing unusual in denying access to anyone.

Maslennikov said that access is often denied depending on the situation which is part of their policy for ensuring customers’ safety and regulatory compliance.

Compliance with Global Policy Standards

He stated that sometimes systems show that digital wallets were suspected of containing stolen or hacked proceeds, terror funding, or child sexual abuse. Resultantly, DApp restricts such wallets from using the app.

Maslennikov explained further that in some cases user access is denied due to compliance with the Anti-Money Laundering (AML) global policy.

He said that the global policy has outlined various rules and one of them relates to terror funding. Because of this too access to the app can be denied, explained Maslennikov.

Inclusion in Grey List Will Encourage Strict Oversight by Regulators

According to Financial Action Task Force (FATF) in various countries, AML policy guidelines are taken for granted.

FATF suggested that the countries, which are found to be ignoring AML standards, should be put on the grey list. Consequently, regulatory oversight on exchanges acting lame in complying with AML shall be automatically increased.

The authority further noted that currently there are more than 23 countries that are enlisted in the grey list because they did not ensure AML compliance.

The grey list includes countries amongst many such as the Philippines, UAE, etc.