Woofun AI reports that the Financial Action Task Force (FATF) issued a report on Tuesday stating that DeFi arrangements with identifiable individuals holding "control or sufficient influence" must be regulated as virtual asset service providers. The report highlights that many DeFi projects exhibit centralized elements, such as concentrated governance tokens and insider fee flows. FATF categorizes DeFi into three types: those with identifiable controllers, those with hidden operators, and truly leaderless systems, with only the latter exempt from standards.

The report notes that nearly 93% of surveyed jurisdictions have not applied relevant standards to qualifying DeFi arrangements, with only 26 of 142 assessing risks, 4 establishing licensing rules, and 2 registering platforms. FATF requires countries to mandate anti-money laundering controls in smart contracts or interfaces, allowing jurisdictions to prohibit non-compliant platforms locally as a last resort.

Additionally, the report states that total value locked in DeFi reached $86.6 billion this year, an increase of approximately 85% compared to 2023.